LinkedIn has settled with the US Department of Labor (DoL) over allegations that the tech company carried out systemic, gender-based pay discrimination.

The DoL announced the settlement yesterday on behalf of 686 female workers in California. A compliance evaluation from its Office of Federal Contract Compliance Program (OFCCP) found that between 1 March, 2015 and 1 March, 2017, LinkedIn failed to comply with Executive Order 11246. The order prohibits federal contracts from discriminating on the basis of race, colour, religion, sex, gender identity, disability, or national origin.

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Specifically, it alleged that the company didn’t provide equal pay to the affected female workers in its engineering and marketing job family groups in San Francisco, and its engineering and product job family groups in Sunnyvale.

Under the terms of the agreement, LinkedIn will pay $1.8 million in back wages and interest to the affected workers. It will also conduct a staff training programme to ensure compliance with LinkedIn’s non-discrimination obligations. Lastly, it will also evaluate for the next three years whether the company’s compensation is gender neutral and make salary adjustments if not. It’s also set to revise its compensation policies and practices and agreed to monitoring and reporting to ensure compliance with federal contract obligations.

“Our agreement with LinkedIn resolves alleged pay discrimination that denied 686 female workers at the company’s San Francisco and Sunnyvale locations their full wages,” explained OFCCP regional director Jane Suhr. “In addition to recovering $1.8 million in back wages and interest for these workers, our agreement will ensure that LinkedIn better understands its obligations as a federal contractor and complies in the future.”

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. 

LinkedIn published a response on its website where it stated: “While we have agreed to settle this matter, we do not agree with the government’s claims; LinkedIn pays and has paid its employees fairly and equitably when comparing similar work.”

The Microsoft-owned company cited an “equal pay analysis” it conducted in 2021 where it found globally, for every $1 earned by men, its female employees earned $0.999. It added that in the US, its employees of colour earn $1 for every $1 earned by its white employees.

The DoL was criticised in December 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. This emerged as HCL Technologies was accused of underpaying its workers on H-1B visas in the US by $95 million annually.