When Employers Steal from Their Workers

LinkedIn is to pay nearly $6M in unpaid overtime wages and damages to 359 employees.

Wage theft is a growing problem

Following an investigation by the US Department of Labor, LinkedIn has agreed to pay over $3 million in overtime back wages and $2.5 million in liquidated damages to 359 former and current employees working at company branches in four states. The Fair Labor Standards Act requires companies to have record-keeping systems in place to record overtime hours worked and to ensure that employees are paid for those hours, requirements that the company was not meeting.

High profile cases of wage theft have been reported before in low-income jobs, such as workers being pressured to work “off the clock” or the falsifying of time sheets. A survey carried out by Hart Research Associates and published in April found that 90 percent of fast food workers have had their wages illegally deducted, and McDonald’s managers have reported that off-the-clock working has been routine for years through such practices as manipulating the data in the corporate payroll system to reduce the number of hours worked. The company is now subject to a lawsuit to recover stolen wages. Such theft is rife in fast food and other blue collar occupations, a practice that is said to add up to more stolen money than all the store robberies and bank robberies nationwide.

The LinkedIn case is noteworthy in highlighting how wage theft is also a white collar problem. Google, Apple, Intel, Intuit and Adobe are in the process of settling a $3 billion lawsuit for their infamous “anti-poaching” deal that suppressed wages by preventing employees from moving from one company to another. Hedge funds have been known to press criminal charges for “theft of trade secrets” against former employees who dare to switch jobs and go to a competitor, landing them potential jail time. White collar wage theft has historically been hidden behind such complex legal stratagems, but the LinkedIn case is the kind of blatant direct thievery one would expect to find in a drive-thru.

“Off-the-clock hours are all too common for the American worker,” says Susana Blanco, district director for the Department of Labor’s Wage and Hour Division in San Francisco. “This practice harms workers, denies them the wages they have rightfully earned and takes away time with families. We urge all employers, large and small, to review their pay practices to ensure employees know their basic workplace rights and that the commitment to compliance works through all levels of the organization.”

LinkedIn has agreed to provide compliance training and distribute its policy prohibiting off-the-clock work to all nonexempt employees and their managers, meet with managers of current affected employees to remind them that overtime work must be recorded and paid for, and remind employees of LinkedIn’s policy prohibiting retaliation against any employee who raises concerns about workplace issues.

Whether or not the case acts as a deterrent to unscrupulous employers in the high-tech industry remains to be seen.