Professional social network LinkedIn has agreed to pay hundreds of US employees a total of US$6m in unpaid wages and liquidated damages, after an embarrassing payroll oversight was picked up by regulators rather than the HR department.
A US Department of Labor investigation found that 359 former and current employees that worked in LinkedIn’s California, Illinois, Nebraska and New York offices had been left short-changed by violations of the overtime and record-keeping provisions of the Fair Labor Standards Act.
LinkedIn failed to record, account and pay for all hours worked in a work week, the US investigators found.
Under the US FLSA Act, non-exempt employees are required to be paid at least the federal minimum wage of US$7.25 per hour for all hours worked, plus time and one-half their regular hourly rates for hours worked beyond 40 per week.
Employers who violate the law – like LinkedIn in this case –are liable for paying employees back wages and an equal amount in liquidated damages.
“Off-the-clock hours are all too common for the American worker. This practice harms workers, denies them the wages they have rightfully earned and takes away time with families,” the Department of Labor’s Susana Blanco said.
The US regulator said that when notified of the payment violations, LinkedIn agreed to pay the overtime back wages due. As a result, the social network is due to pay US$3,346,195 in overtime and US$2,509,646 in liquidated damages to the affected employees.
LinkedIn has also agreed to take proactive steps to prevent repeat violations. Under an enhanced compliance agreement, LinkedIn will conduct compliance training and distribute its policy prohibiting off-the-clock work to all no-exempt employees and their managers.
LinkedIn will also conduct meetings with managers of current affected employees to remind them that overtime work must be recorded and paid for, while its policy prohibiting retaliation against employees raising concerns about workplace issues will be promoted within the company.
The US regulator said in a statement that LinkedIn’s management had shown “a great deal of integrity” by fully cooperating with investigators and “stepping up to the plate without hesitation to make workers whole.”