Professional networking company LinkedIn agreed to pay close to US$6 million in overtime back wages and damages to employees at its branches in California, Illinois, Nebraska and New York, the U.S. Department of Labor said Monday.
The payments to 359 former and current employees were made after LinkedIn was found to have violated overtime and record-keeping provisions under the federal Fair Labor Standards Act, which prescribes minimum wage, overtime pay, record keeping and youth employment standards for employees in the private sector and in government.
LinkedIn agreed to pay the overtime back wages and take steps to prevent repeat violations, including providing compliance training to relevant employees and their managers, the Labor Department said in a statement. Its investigators found the company did not record, account and pay for all hours worked in a work-week.
The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked. Workers are entitled to one and half time their normal wages for hours worked beyond 40 per week. Employers are also required to maintain accurate time and payroll records.
The Labor Department praised LinkedIn for showing "a great deal of integrity," by cooperating with investigators and agreeing to compensate the affected employees.
LinkedIn said in an emailed statement that the issue was "a function of not having the right tools in place for a small subset of our sales force to track hours properly." The company said that it had already started remedying the problem before the Department of Labor approached it. The amount owed in the settlement has already been paid, a spokesman said.
The payment to the workers under the accord includes over $3.3 million in overtime back wages and about $2.5 million in damages.
Join the CIO New Zealand group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.