LinkedIn to pay $1.8 million to settle pay discrimination case

Career-networking service LinkedIn has agreed to pay $1.8 million in back wages to almost 700 female workers to settle a pay discrimination complaint brought by U.S. labor investigators.

The U.S. Labor Department announced Tuesday that it reached a settlement agreement with LinkedIn to resolve allegations of "systemic, gender-based pay discrimination" in which women were paid less than men in comparable job roles. 

The settlement affects women who worked in engineering, product or marketing roles from 2015 to 2017 at the company's offices in San Francisco and Sunnyvale, California. It includes the time before and after Microsoft's $26.2 billion acquisition of LinkedIn in 2016.

LinkedIn has denied the pay discrimination and argued that its statistical models didn't identify pay disparities, according to the settlement. 

"While we have agreed to settle this matter, we do not agree with the government's claims," LinkedIn said in a statement Monday. "LinkedIn pays and has paid its employees fairly and equitably when comparing similar work."

LinkedIn officials said they conducted a pay study last year that found the company paid female employees $0.99 for every $1 a male employee earned. In the U.S., employees of color earn the same pay as White employees, LinkedIn said.

The Labor Department said its own analysis found significant pay disparities even after controlling for "legitimate explanatory factors."

The agency said the case was sparked by a routine evaluation by its Office of Federal Contract Compliance Programs. Federal laws ban discriminatory practices at companies that contract with the federal government, as does LinkedIn.

Of the $1.8 million, LinkedIn will give:

• $719,592 in back pay for women working in engineering in Sunnyvale plus $13,120 in interest. 
• $370,974 in back pay for women working in the product division in Sunnyvale plus $13,120 in interest. 
• $232,448 in back pay for women working in engineering in San Francisco plus $13,120 in interest. 
• $424,506 in back pay for women working in marketing in San Francisco plus $13,120 in interest.

Under the settlement, LinkedIn must also host staff trainings on avoiding discriminatory practices and the company must evaluate its staff salaries over the next three years to make sure they're gender neutral. 

These steps will help make sure "LinkedIn better understands its obligations as a federal contractor and complies in the future," Office of Federal Contract Compliance Programs regional director Jane Suhr said in a statement.