A U.S. Department of Labor investigation found that 359 former and current employees spanning across multiple LinkedIn office locations had been underpaid due to violations of the overtime and record-keeping provisions of the Fair Labor Standards Act (FLSA). This is a cautionary tale for employers of an easily preventable payroll oversight. Under the US FLSA, non-exempt workers are required to be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and a half for hours worked beyond 40 hours per week. LinkedIn breached this regulation by not tracking or paying non-exempt employees for “off-the-clock” overtime hours. Violators of this law are liable for paying employees back wages going back three years.
Off-the-clock hours are becoming very common among American workers. It is extremely important that employers properly track all non-exempt employee hours. Educating employees and managers about these requirements is essential to maintaining compliance, as is having proper policies and practices related to tracking time, scheduling and overtime, and monitoring labor costs. LinkedIn has realized the importance of this, and has not only agreed to pay what it owes, but also will be implementing an enhanced compliance plan that will help the company to maintain a vigilant path moving forward.
Regardless of your industry or size, it is advisable to regularly audit job classifications and practices to ensure that your organization maintains compliance with the FLSA. The nuances of employment law can be a tricky path to navigate; many businesses benefit from outside help to ensure they are compliant with these laws and regulations. Taking steps to ensure compliance with the FLSA and other relevant employment law, however, can save your organization’s reputation and a lot of legal and financial trouble down the road.