Last week, the Department of Labor announced that LinkedIn paid nearly $6 million ($3.3 million in back wages and $2.5 in liquidated damages) to 359 employees in back wages and damages for unpaid overtime, after an investigation by the Department’s Wage and Hour Division found that the company was in violation of the overtime and record-keeping provisions of the Fair Labor Standards Act (FLSA). LinkedIn earned praise from the Department of Labor because, when notified of the violations, the company quickly cooperated, agreed to pay all the overtime back wages and to take proactive steps to prevent repeat violations.
The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage ($7.25 /hour) for all hours worked, plus time and one-half their regular hourly rates for hours worked beyond 40 per week. The law also requires employers to maintain accurate time and payroll records and prohibits retaliation against employees who exercise their rights under the law. Under the FLSA, employers who violate the law are, as a general rule, liable to employees for their back wages and an equal amount in liquidated damages, which is why LinkedIn paid $3.3 million in back wages and another $2.5 million in damages.
Why did this happen in the first place? A LinkedIn spokesperson is quoted in the story as saying:
LinkedIn is clearly in the process of putting “the right tools in place” so employees and managers are able to properly account for time worked, and that is great. Having the right tools is critical. But so is having a culture that supports reasonable work hours and annual employment law training courses – such as wage and hour training – that reinforces for employees how important it is to follow the company’s record keeping practices and ensure full accounting for all hours worked. The press release announcing the settlement indicated that LinkedIn also entered into an enhanced compliance agreement with the department that includes – I was glad to see this – agreeing to provide wage and hour training and distribute its policy prohibiting off-the-clock work to all nonexempt employees and their managers.
The company has also agreed to make other changes to its internal controls to ensure it remains in compliance. LinkedIn executives will meet with the managers of the employees who were affected by this issue to remind them that overtime work must be recorded and paid for, which, again, they will be reminded of in wage and hour training. The executives are also going to remind employees of LinkedIn’s policy prohibiting retaliation against any employee who raises concerns about workplace issues.
There are a couple of key phrases in that last paragraph: internal controls, training, policy and retaliation. I’m glad to see them all listed together because that tells me that LinkedIn is going to take an integrated approach. For any particular ethics and compliance topic, be it anti-bribery, conflicts of interest, sexual harassment, ethics reporting or preventing workplace violence, a campaign that utilizes many vehicles, rather than just a one-off tactic, will always be more successful in driving home a message.
Employment law training courses, such as wage and hour training, are an important part of any compliance training program, but frankly, I don’t think I’ve ever taken one of those courses in my entire career. And that raises another issue that the Department of Labor comments on, as does the author of the article I sourced above, and that is, how common it is in America to just never stop working. This is a particular problem in the tech industry where it can be an “unwritten rule” that employees are to just work as long as it takes.
Susana Blanco, District Director for the San Francisco Division of the Department of Labor, said:
I’m happy to see that LinkedIn has agreed to make the necessary changes; I’ve always been an admirer of the organization and I’m glad to see them quickly rectify their mistake. We’re all human, after all. I hope other companies can learn from this, though, and that the American culture of “keep working until you drop” starts to change. It’s not only unhealthy and unproductive, it’s illegal.
Have you taken wage and hour training? Is it part of the standard ethics and compliance training at your company?