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Feds say LinkedIn short-changed its workers

NEW YORK - For many career-minded employees, LinkedIn (LNKD) has become an essential tool for getting ahead. But it seems the professional networking service is a less friendly environment for some of its own workers.

A U.S. Labor Department investigation found that branches of LinkedIn in four states violated overtime and record-keeping rules mandated under the federal Fair Labor Standards Act (FLSA). Under a settlement with the agency announced on Monday, the company must pay nearly $6 million in unpaid wages and damages to 359 current and former employees of the firm.

Specifically, the government said that LinkedIn failed to record and pay for all the hours that employees worked at the company's branches in California, Illinois, Nebraska and New York.

The FLSA requires companies to pay covered, nonexempt workers no less than the federal minimum wage of $7.25 an hour, plus time-and-a-half employees' regular pay if they work more than 40 hours per week.

"'Off the clock' hours are all too common for the American worker," Susana Blanco, district director for the Labor Department's Wage and Hour division, said in a statement. "This practice harms workers, denies them the wages they have rightfully earned and takes away time with families."

The Labor Department says LinkedIn agreed to pay the back wages once it was notified of the violations, as well as to take steps to prevent them from happening again.

A LinkedIn spokesman said the company moved to remedy the pay issue before its was approached by the Labor Department.

"Talent is LinkedIn's No.1 priority, so of course, we were eager to work closely with the Department of Labor to quickly and equitably rectify this situation," he said. "This was a function of not having the right tools in place for a small subset of our sales force to track hours properly. LinkedIn has made every effort possible to ensure each impacted employee has been made whole."

Under the settlement, LinkedIn agreed to more stringent oversight by labor regulators. That will include reminding company managers that overtime work must be paid for and that the company bar retaliation against employees who raise concerns about workplace problems.