LinkedIn: Online Professional Business Giant Paid Out $6 Million in Overtime Pay Violation
LinkedIn, the online professional business giant that boasts of 300 million users, recently paid out $6 million to its workers for overtime pay violations.
It was revealed this week by the Department of Labor in San Francisco that LinkedIn had violated rules under the Fair Labor Standards Act, making the company pay $6 million in back wages and damages to 359 of its current and former employees. LinkedIn's story stretches farther than the website's three-step process to signing up.
An investigation was carried out by the Labor Department which showed that the professional social network giant had violated the act by not paying their employees overtime pay when work exceeded the 40-hour work week. LinkedIn also failed to keep accounts and records for all of the employees' hours worked for the period of 2012, and 2014.
LinkedIn's payout extends to their company branches in California, Illinois, Nebraska, and New York, InformationWeek reported. The company will pay over $3.3 million in back wages, and a little over $2.5 million in liquidated damages.
Only under the Fair Labor Standards Act that nonexempt employees will be covered and have to be paid at least the federal minimum wage of $7.25 an hour. This is for all hours worked including time-and-a-half hours that go beyond 40-hours a week, Madame Noire reported.
The labor department can reduce liquidated damages only if a company shows a good faith defense for not adhering to the law. This could be advice coming from legal counsel or an accountant. In other words, the liquidated damages could be reduced if LinkedIn made a bad judgement based on the advice that they were given, San Francisco Gate reported.
But according to the Labor department, LinkedIn has shown "a great deal of integrity by fully cooperating with investigators and stepping up to the plate without hesitation to help make workers whole," David Weil, administrator of the Labor Department's Wage and Hour Division, said in a statement, Fortune reported.
A LinkedIn official stated that those employees who were affected by this payout were made up of a "small subset" of the company's overall sales, according to Fortune. The official also added that the company "has made every effort possible to ensure each impacted employee has been made whole."
Besides the agreed back pay and liquidated damages, LinkedIn has agreed to set up policy updates that will ensure the company's compliance with labor laws in the future, InformationWeek reported. As part of this policy update, the company has pledged to provide training, and distribute a policy of preventing "off-the-clock" work to all nonexempt employees and their managers.
LinkedIn agreed to meet and discuss with managers of those affected employees to remind and perhaps emphasize that all overtime work must be recorded and paid for. And, they will inform employees of the company's policy which does not allow retaliation against any other employee who wants to raise the issues and concerns about the workplace, InformationWeek reports.
Susana Blanco, district director for the Department of Labor's San Francisco division, said in a statement that "'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."
Blanco also urged that the employers of big and small businesses should review their payment methods so that employees know their workplace, according to InformationWeek.
A LinkedIn official added that "talent is LinkedIn's number one priority." This made the company more than willing and eager to work with the Department of Labor so that they could "quickly and equitably rectify this situation."
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