LinkedIn Stiffed Its Own Employees, Agrees to Pay Millions

LinkedIn, the social network to which professionals turn to find better jobs, has agreed to pay nearly $6 million in back-pay and damages for short-changing its own employees. The payout for violations of the Fair Labor Standards Act includes about $3.3 million in unpaid wages and $2.5 million in liquidated damages, affecting 359 current or former workers in New York, Nebraska, Illinois, and LinkedIn’s home state of California.

“‘Off the clock’ hours are all too common for the American worker,” Susana Blanco, who directs the Department of Labor’s Wage and Hour Division’s San Francisco district office, said in a press release. The Wage and Hour division’s administrator, David Weil, was quoted crediting LinkedIn with showing “a great deal of integrity by fully cooperating with investigators and stepping up to the plate without hesitation to help make workers whole.” LinkedIn entered an “enhanced compliance agreement” under which it will mount compliance training and remind workers of their right to speak out about work issues without being punished.

For its part, LinkedIn said in a statement that the issue “was a function of not having the right tools in place for some employees and their managers to track hours properly; prior to the Labor Department approaching us, we have already begun to remedy this.”

Companies that fail to pay workers the wages they are legally owed—whether by not paying overtime rates, paying below the minimum wage, or not paying employees for some time that they work—have drawn increasing attention in recent years from labor activists, private attorneys, and government officials. Prior to taking the helm this year at the Wage and Hour Division, Weil, then a professor at Boston University, spearheaded a 2010 report (PDF) recommending that the WHD focus on using penalties as deterrents, expand litigation in cases of noncompliance, and pursue settlement agreements akin to the LinkedIn case.

The employer-side law firm Seyfarth Shaw released (PDF) an analysis of Federal Judicial Center data earlier this year showing a 438 percent increase in the filing of Fair Labor Standards Act cases since 2000. Jurisdictions including New York State, Chicago, Houston, and Florida’s Miami-Dade County have passed legislation strengthening enforcement measures against “wage theft.”

Still, the Department of Labor has faced questions by pro-labor activists about whether it is up to doing its part of the job. “Everybody’s so happy that the Wage and Hour enforcement division went from 750 to 1,000” federal employees, Kim Bobo, the author of Wage Theft in America, said last year. “But that’s just pitiful.” A 2012 report (PDF) from the Progressive States Network found that the ratio of labor enforcement agents to U.S. workers workers had fallen from one for every 11,000 workers in 1941 to one for every 141,000.

    Before it's here, it's on the Bloomberg Terminal.