As a former member of the Air Force military police, as a
play-by-the-rules guy, Drew Pooters said he was stunned by
what he found his manager doing in the Toys "R" Us store in
Albuquerque.

Inside a cramped office, he said, his manager was sitting
at a computer and altering workers' time records, secretly
deleting hours to cut their paychecks and fatten his
store's bottom line.

"I told him, `That's not exactly legal,' " said Mr.
Pooters, who ran the store's electronics department. "Then
he out-and-out threatened me not to talk about what I saw."

Mr. Pooters quit, landing a job in 2002 managing a Family
Dollar store, one of 5,100 in that discount chain. Top
managers there ordered him not to let employees' total
hours exceed a certain amount each week, and one day, he
said, his district manager told him to use a trick to cut
payroll: delete some employee hours electronically.

"I told her, `I'm not going to get involved in this,' " Mr.
Pooters recalled, saying that when he refused, the district
manager erased the hours herself.

Experts on compensation say that the illegal doctoring of
hourly employees' time records is far more prevalent than
most Americans believe. The practice, commonly called
shaving time, is easily done and hard to detect - a simple
matter of computer keystrokes - and has spurred a growing
number of lawsuits and settlements against a wide range of
businesses.

Workers have sued Family Dollar and Pep Boys, the auto
parts and repair chain, accusing managers of deleting
hours. A jury found that Taco Bell managers in Oregon had
routinely erased workers' time. More than a dozen former
Wal-Mart employees said in interviews and depositions that
managers had altered time records to shortchange employees.
The 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."

Officials at Toys "R" Us, Family Dollar, Pep Boys, Wal-Mart
and Taco Bell say they prohibit manipulation of time
records, but many acknowledge that it sometimes happens.

"Our policy is to pay hourly associates for every minute
they work," said Mona Williams, vice president for
communications at Wal-Mart. "With a company this large,
there will inevitably be instances of managers doing the
wrong thing. Our policy is if a manager deliberately
deletes time, they're dismissed."

Compensation experts say that many managers, whether at
discount stores or fast-food restaurants, 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."

Another reason managers shave time, experts say, is that an
increasing part of their 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."

Beth Terrell, a Seattle lawyer who has sued Wal-Mart,
accusing its managers of doctoring time records, said:
"Many of these employees are making $8 an hour. These
employees can scarcely afford to have time deleted. They're
barely paying their bills already."

In the punch-card era, managers would have had to conspire
with payroll clerks or accountants to manipulate records.
But now it is far easier for individual managers to
accomplish this secretly with computers, payroll experts
say.

Mr. Pooters, a father of five who left the Air Force in
1997 for a career in retailing, talks with disgust about
photocopied Toys "R" Us records that he said showed how his
manager made it appear that he had clocked out much earlier
than he had.

"Unless you keep track of your time and keep records of
when you punch in and punch out, there's no way to stop
this," he said.

After leaving Toys "R" Us and Family Dollar, Mr. Pooters
moved to Indiana and took a job as an account manager with
Rentway, a chain that leases furniture and electronics.
There, he and a co-worker, William Coombs, said, the
workload was so intense that they typically missed four
lunch breaks a week. Nonetheless, they said, their manager
inserted a half-hour for lunch into their time records
every day, reducing their pay accordingly.

"They told us to sign the payroll printouts to confirm it
was right," Mr. Pooters said, describing a confrontation
last November. "When we protested about what happened with
our lunch hours, the manager said, `If you don't sign,
you're not going to get paid.' "

Mr. Coombs said: "They removed our lunch hours all the
time. We were told if we didn't sign the payroll sheets,
we'd be terminated."

Larry Gorski, Rentway's vice president for human resources,
said his company strictly prohibited erasing time. "As soon
as we hear this is going on, we jump all over it," he said.

Shannon Priller, who worked at a Family Dollar store in Rio
Rancho, N.M., sheepishly acknowledged that she sometimes
watched her district manager erase her hours. "The manager
and I would sit there and go over everybody's time cards,"
she said. "We were told not to go over payroll, or we would
lose our jobs. If we were over, my hours would get shaved."

Some weeks, she said, she lost 10 or 15 hours, and her 6
a.m. clock-in time became 9 a.m. Patricia Bauer, a clerk at
the store, said her paycheck was sometimes cut to under 30
hours on weeks when she worked 40.

Like Mr. Pooters, these women have joined a lawsuit that
accuses Family Dollar of erasing time and requiring
off-the-clock work. "It needs to stop," said Ms. Priller,
who now cleans houses.

Kim Danner said that when she ran a Family Dollar store
with eight employees in Minneapolis, her district manager
urged her to erase hours so that she never paid overtime or
exceeded her allotted payroll. Federal law generally
requires paying time-and-a-half to nonmanagerial employees
who work more than 40 hours a week.

Ms. Danner said her employees could not do all the
unloading, stocking, cashier work and pricing of
merchandise in the hours allotted. "The message from the
district manager was, basically, `I don't care how you do
it, just get it done,' " she said.

So she altered clock-out times and inserted half-hour lunch
breaks even when employees had worked through them. "I felt
horrible that I was doing this," she said. "I felt
pressured, absolutely. If I refused, I would have been
terminated easily."

Sandra Wilkenloh, Family Dollar's communications director,
declined to respond to the lawsuit, but said, "Family
Dollar's policy is to fully comply with all wage and hour
laws and to take appropriate disciplinary action in any
case where we determine that such policy has been
violated."

Rosann Wilks, who was an assistant manager at a Pep Boys in
Nashville, said she was fired in 2001 after refusing to
delete time. She said her district manager told her, "Under
no circumstances at all is overtime allowed, and if so,
then you need to shave time."

At first, she bowed to orders and erased hours. Some
employees began asking questions, she said, but they
refused to confront management. "They took it lying down,"
she said. "They didn't want to lose their job. Jobs are
hard to find."

When she started feeling guilty and confronted her district
manager, she said, "It all came to a boil. He fired me."

"Pep Boys' policy dictates, and record demonstrates, that
any store manager found to have shaved any amount of
employee time be terminated," he said. He added that the
company's investigation "revealed no more than 21 instances
over the past five years where time shaving" had occurred.

More than a dozen former Wal-Mart employees said time
records were altered in numerous ways. Some said that when
they clocked more than 40 hours a week, managers
transferred extra hours to the following week, to avoid
paying overtime. Federal law bars moving hours from one
week to another.

Wal-Mart executives acknowledged that one common practice,
the "one-minute clock-out," had cheated employees for
years. It involved workers who clocked out for lunch and
forgot to clock back in before finishing the day. In such
situations, many managers altered records to show such
workers clocking out for the day one minute after their
lunch breaks began - at 12:01 p.m., for example. That way a
worker's day was often three hours and one minute, instead
of seven hours.

Ms. Williams, the Wal-Mart spokeswoman, said Wal-Mart had
broadcast a video to store managers last April telling them
to halt all one-minute clock-outs. Under the new policy,
when workers fail to clock in after lunch, managers must do
their best to determine what their true workday was.

In interviews, five former Wal-Mart managers acknowledged
erasing time to cut costs. Victor Mitchell said that as an
assistant manager in Hazlehurst, Miss., in 1997, he
frequently shaved time.

"We were told we can't have any overtime," he said. "It's
what the other assistant managers were doing, and I went
along with it."

Mr. Mitchell said the store's manager ordered them to stop.
But he said that in 2002, after becoming manager of a
Wal-Mart in Bogalusa, La., a new district manager ordered
him to erase overtime. He said he refused.

Ms. Williams said Wal-Mart had increased efforts to stop
managers from shaving time or allowing off-the-clock work.

Wal-Mart has circulated a "payroll integrity" memo, saying
that any worker, "hourly or salaried, who knowingly
falsifies payroll records is subject to disciplinary action
up to and including termination."

Employees at Wal-Mart and other companies complain that
they receive no paper time records, making it hard to
challenge management when their paychecks are inexplicably
low.

Ms. Danner, the former Family Dollar manager, praised the
system at the McDonald's restaurant she managed for seven
years. At day's end, she said, employees received a
printout detailing total hours worked and when they clocked
in and out.