Both companies also agreed to delete any unlicensed copies of programs in use, purchase replacement software and strengthen their software management practices.

"BSA recommends that all companies and organizations have strong software management policies in place -- including periodic internal audits, guidelines for supervisors and clear procedures for employees," Jenny Blank, director of enforcement for the BSA, said in the statement. "We hope this settlement will set an example to other businesses that software should be managed just as carefully as any other more tangible asset."

Most investigations begin with a call to the BSA's hot line or with a report to BSA's online reporting form by current or former "disgruntled" employees who are unhappy with their employers and see no reason to keep the secret any longer, Blank said in an interview.

The BSA received reports on Payless and Burlington Coat Factory through the online reporting form, she said. Both companies then cooperated with the BSA and conducted self audits.

"They provided those results to us, and we were able to use that data to reach the settlement agreements," Blank said.