The franchisee of a pizza delivery business in New York City was found to have incorrectly recorded hours worked by employees, leading to a class-action lawsuit that cost the local company $1.28 million.

The lack of proper accounting for employee attendance led to discrepancies in pay, according to the delivery employees. They claimed to have been denied overtime payment and regular wages because of the hour cutting, according to The New York Times. Some drivers were awarded more than $60,000 in the settlement, which based payouts on the length of time workers had spent at the company.

The lawsuit itself took more than two years to resolve, creating a significant time and monetary obligation for the company involved.

Workforce.com pointed out that the violation of basic principles of the Fair Labor Standards Act - that workers need to be paid for hours put in and that overtime is required whenever non-exempt employees record more than 40 hours in a single workweek - led to a large financial loss for the employer.

Companies looking to ensure compliance with the FLSA should consider using employee management software to aid in recordkeeping and correct payments.

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