"Time shaving," or the illegal doctoring of hourly employees' time
records, is far more prevalent than most Americans believe, according to compensation
experts interviewed by The New York Times.
The computer age makes time shaving easy. In the punch-card era, a manager
would have had to conspire with payroll clerks or accountants to manipulate
records. Now, he or she can act alone, with just a few keystokes.
Nevertheless, time shaving has spurred a growing number of lawsuits and settlements
against a wide range of businesses. For example:
- Workers have sued Family Dollar, a discount-retail chain, and Pep Boys,
the auto parts and repair chain, accusing managers of deleting hours.
- A jury found that Taco Bell managers in Oregon routinely erased workers'
- More than a dozen former Wal-Mart employees said in interviews and depositions
that managers had altered time records to shortchange employees.
- The U.S. Department of Labor recently reached two back-pay settlements with
Kinko's photocopy centers, totaling $56,600, after finding that managers in
Ithaca, N.Y., and Hyannis, Mass., had erased time for 13 employees.
"There are a lot of incentives for store managers to cut costs in illegal
ways," said David Lewin, a professor of management who teaches a course
on compensation at the University of California, Los Angeles. "You hope
that would be contrary to company practices, but sometimes these practices become
so ingrained that they become the dominant practice."
Compensation experts told the Times that many managers fear losing their jobs
if they fail to keep costs down.
"A lot of this is that district managers might fire you as soon as look
at you," said William Rutzick, a lawyer who reached a $1.5 million settlement
with Taco Bell last year after a jury found the chain's managers guilty of erasing
time and requiring off-the-clock work. "The store managers have a toehold
in the lower middle class. They're being paid $20,000, $30,000. They're in management.
They get medical. They have no job security at all, and they want to keep their
toehold in the lower middle class, and they'll often do whatever is necessary
to do it."
Moreover, an increasing part of managers' compensation comes in bonuses based
on minimizing costs or maximizing profits.
"The pressures are just unbelievable to control costs and improve productivity,"
said George Milkovich, a longtime Cornell University professor of industrial
relations and co-author of the leading textbook on compensation. "All this
manipulation of payroll may be the unintended consequence of increasing the
emphasis on bonuses."