LinkedIn busted over worker pay, pays $6 million

The booming Mountain View company that helps people find jobs has been ordered by the United States Labor Department to pay nearly $6 million in damages and unpaid overtime wages to 359 employees.

The practice of not paying overtime affected employees in LinkedIn’s offices in California, Nebraska, Illinois and New York, according to the U.S. Labor Department, which conducted an investigation. LinkedIn was cooperative and quickly agreed to pay the employees the overtime pay that was due, Labor Department officials said, and agreed to take steps to prevent it from happening again.

LinkedIn agreed to pay the 359 employees $3.3 million in unpaid overtime wages and $2.5 million in damages.

“This company 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,” said Dr. David Weil, administrator of the wage and hour division.

LinkedIn’s vice president of corporate communications, Shannon Stubo, in news reports blamed the problem on “not having the right tools in place for a small subset of our sales force to track hours properly.”

Officials say that LinkedIn entered an “enhanced compliance agreement” that requires the company to remind employees of LinkedIn’s policy against retaliating against employees who raise issues in the workplace. It also requires that managers and employees be reminded and trained about company policies prohibiting off-the-clock work and the need to record and pay for overtime work.

“‘Off the clock’ hours are all too common for the American worker,” said Susana Blanco, district director for the Labor Division in San Francisco. “This practice harms workers, denies them the wages they have rightfully earned and takes away time with families. We urge all employers, large and small, to review their pay practices to ensure employees know their basic workplace rights and that the commitment to compliance works through all levels of the organization. The department is committed to protecting the rights of workers and leveling the playing field for all law-abiding employers.”

LinkedIn was found to have violated provisions of the Fair Labor Standards Act when it failed to keep track of overtime hours worked and then pay employees accordingly. The law also requires that overtime pay be 1.5 times an employee’s regular hourly pay.

Despite the news, LinkedIn’s stock continued to rise as it has done in recent months and as it has since the company recently reported significant second quarter profits. The company has also proposed significant expansion of its headquarters in Mountain View, possibly adding a million square feet of offices in North Bayshore, including a new office tower on North Shoreline Boulevard along the north side of Highway 101.