LinkedIn, the professional networking platform, and the United States Department of Labor have reached an agreement whereby LinkedIn will pay $1.8 million to female employees, who reportedly received far less compensation than their male counterparts from 2015 to 2017.
In a statement released by the Department of Labor on Tuesday, LinkedIn denied equal pay to 686 women at its San Francisco office and the professional networking platform’s headquarters in Sunnyvale, Calif.; these women were engaged in engineering, marketing, and product roles.
According to the appeasement agreement between LinkedIn and the Labor Department, during a routine evaluation, the Department of Labor found that the women in question had been paid “at a statistically significant lower rate” than their male colleagues even after considering “legitimate explanatory factors.”
“Our agreement will guarantee that LinkedIn better understands its obligations as a federal contractor,” Jane Suhr, a regional director of the Labor Department’s Office of Federal Contract Compliance Programs, said in the agency’s statement.
The $1.8 million fine comes out to 0.02% of LinkedIn’s $10 billion revenue it achieved for the first time in the fourth quarter of 2021.
However, in a statement on Tuesday, LinkedIn, which Microsoft owns, denied that it discriminated against certain employees. “While we have agreed to settle this matter, we do not agree with the government’s claim,” the statement said.
As per the conciliation agreement, the settlement includes around $1.75 million in back pay and more than $50,000 in interest to be paid to the affected 686 women. LinkedIn has also agreed to send the Department of Labor reports over the next three years as it appraises its compensation policies and makes salary adjustments, the agency said. The company has also agreed to run an employee training program on “nondiscrimination obligations.”
On the other hand, LinkedIn reported that its women employees earned $0.999 for every dollar earned by its male employees last year. The company said that it employs more than 19,000 people worldwide. “LinkedIn pays and has paid its employees fairly and equitably when comparing similar work,” the statement said.
It is worth mentioning that under a 1965 executive order, it is mandatory for all federal contractors, including LinkedIn, to provide “equal opportunity” to their employees. They cannot discriminate based on sex, gender identity, or other factors.
Overall, women in the United States were paid less than men. In 2021, women working full time earned about 83 percent of what their male counterparts did, the United States Bureau of Labor Statistics reported in January.
Tech companies have faced particular scrutiny over, what critics say, are failures to provide equal opportunities to women and people of color.
In February 2021, Google reached a $3.8 million settlement with the Labor Department amid accusations that it made hiring and compensation decisions against female and Asian employees and applicants.
Under an agreement with state authorities in Rhode Island, Pinterest pledged $50 million in November 2021 to undertake reforms to resolve allegations that it discriminated against women and people of color.
In December, the Department of Labor was criticized for propping up the abusive outsourcing business model by treating contractor hires differently than direct hires when enforcing the wage and other provisions in the H-1B statute that are supposed to protect H-1B and US workers. The anomalies emerged as HCL Technologies was accused of underpaying its workers on H-1B visas in the United States by $95 million annually.
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