Tom has been employed by ACME Corporation for the past two years. ACME bills by invoice with a 1 hour minimum ($75.00 for the first 0-60 minutes and $28.00 per half hour after the first hour). This means that it is possible for Tom to get paid for over 8 hours in an 8-hour-period. It also means that ACME Corporation can earn considerable more money than if its employees billed only for actual time spent on the job. For several months Tom was uncomfortable with billing a customer for time he really didn't work. For example, if it took him 30 minutes to do a repair he would bill the minimum 1 hour. If it took him 75 minutes he would bill for 1 and a half hours and so forth. Since Tom was uncomfortable with this practice he would always do preventative maintenance (PM) on other equipment owned by the customer to finish out the nearest billing increment.

Tom's supervisor, Tony, noticed that Tom rarely billed for more than 8 hours in a day. When he questioned Tom, and found he was working the time billed by doing PM work, Tony cam unglued. He pointed out to Tom that the company also sells PM contracts and bills for PM work in a manner similar to regular repairs. By doing PM work without charging extra for it, the company was losing money. As Tom thought about this, he could see the error of his ways and he quit doing extra un-billed work. In fact, Tom found that it was much to his advantage to get a repair done in around 40 minutes or less. In this way he could bill for and be paid for a full hour while he began work for another customer. This made more money for both Tom and ACME. Tome even began finding ways to stretch a job into the next billing increment (for example: stopping for coffee at a 7-11 can add 10 minutes to billable drive time). He also found ways to cut corners so that he could minimize time spent on a job while still billing for the 1-hour minimum. Now Tom is working about 40 hours a week and getting paid for about 55-hours a week. That means instead of making $15.00 per hour rate, he is getting over $20.00 per hour and ACME is making a lot more money also.

1. Discuss any ethical implications of ACME's billing practice and the effect this practice has on its employees and customers.