Employee Wages: LinkedIn Pays $6M to Correct Violations


According to the U.S. Labor Department (DoL), LinkedIn must pay almost $6 million dollars to 359 former and current employees to cover “unpaid wages and damages.” A recent investigation discovered that LinkedIn Corp was in violation of the federal Fair Labor Standards Act with violations in record-keeping rules and overtime.

Shannon Stubo, LinkedIn’s vice president of corporate communications, stated the discrepancy was “a result of not have the proper tools in place to track the overtime pay for a small subset of LinkedIn’s 2,400 member sales force.” She said the company was eager to “correct the discrepancy” and stated LinkedIn’s intention to “work with the Department of Labor to quickly rectify the situation.”

LinkedIn was founded in 2002 with the mission of connecting people professionally. The company has been a blessing for recruiters who can pay an extra fee to reach out to candidates via a feature that LinkedIn calls InMail. There are approximately 313 million users on the social media network, and growing, which is good news to the company’s 5,700 employees. Especially with the company focus on employment, having issues with their own payroll is publicly embarrassing.

The wage violations occurred between February 2012 and February 2014 with 359 workers, both current and former, who were not properly paid for their overtime. Earlier this month the DoL announced that LinkedIn had mailed the payments to the affected employees, paying almost $6 million to workers in New York, Nebraska, Illinois and California. The fees were divided between damages awarded and overtime wages that were retroactive – $2.5 million for damages and $3.3 million for the retroactive wages.

David Weil, a spokesperson for the Department of Labor’s Wage and Hour Division, issued a statement commending LinkedIn’s integrity by handling the matter quickly and cooperating with investigators. In addition to paying the back wages, LinkedIn has instituted a compliance program to train their workforce on overtime procedures. The policy includes verbiage about recording and paying for overtime with no retaliation against workers who express concern about workplace issues.

According to the U.S. Department of Labor website, the Fair Labor Standards Act (FLSA) requires any employers who permit an employee to work overtime to pay a premium salary rate for that work. In other words, if an employee works more than 40 hours in a week, the pay is one and one-half times the employee’s normal wage. Unless a company states it in the contract, overtime pay is not required for work done on holidays, weekends or “days of rest,” unless they constitute time over the regular 40 hour work week. FLSA requires that overtime pay be included as part of “the normal wage payment.” The FLSA is an important law for the thousands of workers who routinely stay late at the workplace.

Earlier in the month, when the DoL issued their statement about LinkedIn’s wage mistake, the company’s shares were just over two hundred at $202.50 per share. At the time of this article, the stock was at $225.75. If stock pricing indicates a company’s reputation, LinkedIn was not hurt by their $6 million wage mistake, especially since they made things right with their employees.

By Jenny Hansen


Market Watch

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