Last week, the Department of Labor announced that it had entered into a settlement with LinkedIn to resolve allegations of systemic gender-based pay discrimination. LinkedIn denied the allegations. Here’s more detail from the DOL’s press release:
A routine Office of Federal Contract Compliance Programs’ compliance evaluation found that – from March 1, 2015, through March 1, 2017 – LinkedIn failed to comply with Executive Order 11246. Specifically, OFCCP alleged that the employer did not provide equal pay to the affected female workers in positions 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 do the following:
– Pay $1.8 million in back wages and interest to the affected workers.
– Conduct a staff training program to ensure compliance with LinkedIn’s non-discrimination obligations.
– Evaluate – for the next 3 years – whether the company’s compensation is gender-neutral and make salary adjustments if not. LinkedIn will also revise its compensation policies and practices and agreed to monitoring and reporting to ensure compliance with federal contract obligations.
The 3-year commitment to evaluate salaries and report on compliance is a meaningful undertaking that most companies would prefer to avoid, even if the dollar value of this settlement doesn’t create much of a ripple in relation to LinkedIn’s $10+ billion revenue. The conciliation agreement says that the agency found “statistically and practically significant pay disparities in annual base salary based on gender after controlling for legitimate explanatory factors.” While the Executive Order at issue in these allegations is keyed toward federal contractors, that’s a broad group of companies – and this settlement may put gender pay equity back in the spotlight with stakeholders at other companies, too.
It’s important to be proactive here – before someone else forces your hand. We’ve been covering this issue for years and have a great collection of resources in our “Gender & Racial Pay Equity” Practice Area that can help you advise your comp committee and reduce risk. Make sure to check out the transcript from our webcast, “Pay Equity: What Compensation Committees Need to Know” – for practical info about conducting audits, remediation strategies, disclosure issues, board oversight, and shareholder expectations.
-Liz Dunshee, CompensaitonStandards.com May 11, 2022