A Washington company primarily engaged in the installation of drywall materials will have to pay approximately $550,000 to current and former employees, based on a decision from the U.S. Department of Labor.

The total award, to be split between a group of 400 workers, involves both unpaid back wages and damages, according to local news source The Seattle Times. Part of the judgment stems from an improper payment system. Employees were paid per amount of work done instead of on an hourly basis. This form of compensation excluded work activities that did not directly involve hanging drywall, like moving between work sites and other secondary tasks.

The employees were also not paid enough overtime to cover the hours they worked for the company, violating federal and state laws requiring extra pay when more than 40 hours are put in during a workweek. Overtime laws are some of the most clear cut in the entire Fair Labor Standards Act for hourly workers, although misclassification can drive violations.

The company was apologetic after the settlement was reached, with a spokesman saying the employers hadn't intended to break any labor laws.

Companies that want to maintain proper records and ensure payments are correct should consider the use of time and attendance software.

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