WASHINGTON LinkedIn Corp LNKD.N agreed to pay about $6 million in back overtime and damages to 359 current and former employees after a U.S. Department of Labor investigation found the online career networking company violated the country's wage law.
In a settlement announced by the Labor Department on Monday, LinkedIn will pay more than $3.3 million in retroactive overtime wages and more than $2.5 million in damages to workers in California, Illinois, Nebraska and New York.
A Labor Department representative said LinkedIn has mailed the payments to the workers covered by the settlement.
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," said David Weil, the administrator of the Labor Department's Wage and Hour Division, in a statement.
A spokeswoman said that talent is LinkedIn's No. 1 priority, adding that the company was eager to work closely with the Labor Department to reach the settlement.
"This was a function of not having the right tools in place for a small subset of our sales force to track hours properly," said Shannon Stubo, vice president of corporate communications.
The Labor Department's investigation revealed that LinkedIn, based in Mountain View, California, failed to record and compensate workers for all hours worked, violating provisions of the Fair Labor Standards Act (FLSA).
In addition to the settlement payment, LinkedIn will train all employees that "off-the-clock work" is prohibited for all non-exempt workers, the Labor Department said.
The FLSA requires that non-exempt workers, who are not salaried managers, be paid the federal minimum hourly wage of $7.25 plus overtime pay at the minimum rate of 1.5 times the regular hourly rate for hours worked past 40 in a given work week.
LinkedIn's shares closed at $202.50 on Monday, up 0.4 percent on a day when the major U.S. stock indexes bounced back after Friday's sharp selloff.
Last week, LinkedIn reported a 47 percent jump in second-quarter revenue, surpassing analysts' expectations.
The website's membership jumped by a third to 313 million in the quarter that ended June 30.