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LinkedIn Fined $6 Million For Unpaid Hours

Latest Bump In Uneven Year For Professional Social Site

LinkedIn has agreed to pay $6 million in damages and unpaid wages after regulatory investigators found that the professional social networking company had failed to account for all hours worked by its employees.

Costs include $3.5 million of unpaid overtime and $2.5 million in damages to be paid to 359 former and current employees, imposed after the U.S. Department of Labor concluded its investigations this week. The company has also agreed to provide compliance training to all its employees, and to distribute literature detailing its policy prohibiting off-the-clock work for all non-exempt employees and managers.

The Labor Department’s Wage and Hours division stated that the company had violated the Fair Labor Standards Act by failing to fully account and pay for all hours worked by its employees.
While a company spokesperson blamed the oversight on ‘a function of not having the right tools in place,’ investigators still praised LinkedIn for ‘having a great deal of integrity’ for accepting and dealing with the issue as soon as it was made apparent.

The decision is another bump in a turbulent year for LinkedIn, which saw a dip in its share price after a lukewarm economic forecast but has nonetheless managed to increase membership and revenue. In April it was also affected by a technical issue which allowed the email addresses connected to accounts to be viewed by outsiders even if the user in question had hidden it.

Despite these hiccups, the site has made some bold recent steps towards further expansion. It has launched a beta version in China – a move for which it received some criticism as it agreed to Chinese censorship laws, particularly regarding historical events such as Tiananmen Square. Nonetheless, as Facebook and Twitter have both been blocked in China for refusing to comply with the government’s restrictions, the site’s status as the only major Western social media network operating in the country puts it in a powerful position for expansion if it can compete with existing Chinese alternatives such as Dajie and Wealink.

It also launched Sales Navigator, a paid-for tool for salespeople to help with networking and customer relations, earlier this week as a separate app. The product has so far seen good reviews, and looks to help cement LinkedIn as the preeminent home for online professionals.

LinkedIn made one of its relatively rare acquisitions last month, purchasing B2B marketing and analytics firm Bizo for $175 million. In addition, the week prior the site purchased Newsle, a start-up which notifies users on news updates about connections in their social network, for an undisclosed amount. These moves – which mark LinkedIn’s highest rate of purchases since the company was founded – suggest that the company is looking to follow the Facebook and Google model of expansion through acquisition.

In this context, the site’s acquiescence to the Department of Labor’s demands is understandable; now is hardly the time to be engaging in costly lawsuits and recriminations, when this year looks to be a pivotal one in the company’s future.



Douglas is an English Literature graduate who has written about everything from music to food to theatre, now a content creator for Social Media Frontiers. No topic too large or too small. Follow him @DouglasAtSMF.

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LinkedIn Fined $6 Million For Unpaid Hours Reviewed by Anonymous on Tuesday, August 05, 2014 Rating: 5
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