Gender pay gap | Could LinkedIn's $1.8m payout be a major step for equal pay?

Could LinkedIn's $1.8m payout be a major step for equal pay?

Following allegations of gender pay discrimination, LinkedIn reached a deal with nearly 700 female staff, worth $1.8million - a huge pay out accompanied by several future legal evaluations, which could have major implications for the future of gender pay gaps across the States.

The professional networking platform reached a settlement with the U.S. Labor Department over allegations of systemic, gender-based pay discrimination at its San Francisco and Sunnyvale, California, facilities.

A routine Office of Federal Contract Compliance Programs’ compliance evaluation found that – from March 1, 2015, through March 1, 2017 – LinkedIn failed to 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.

“Our agreement with LinkedIn Corp. resolves alleged pay discrimination that denied 686 female workers at the company’s San Francisco and Sunnyvale locations their full wages,” explained Office of Federal Contract Compliance Programs Regional Director Jane Suhr in San Francisco.

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“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.”

In a statement following the resolution, a spokesperson for LinkedIn said: “While we have agreed to settle this matter, we do not agree with the government’s claim.”

According to the Pew Research Center, in 2020 women earned 84% of what men earned, based on analysis of median hourly earnings of both full-time and part-time workers. Based on this estimate, it would take an extra 42 days of work for women to earn what men did in 2020.

Could the measures against LinkedIn send a warning to others?

The eye-watering payout might be enough of a warning for most to learn their lesson. If not the extra legwork that LinkedIn must put in for the next few years should send a stark warning to companies who aren’t paying their female-identifying staff correctly.

For example, some of the terms LinkedIn must also agree to over the coming years might

Under terms of the legal agreement, LinkedIn must conduct a staff training program to ensure compliance with LinkedIn’s non-discrimination obligations.

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And over the next three tears, they must evaluate 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.

Janelle Jones, Chief Economist for the US Department of Labor, says: “Unfortunately, the pandemic stalled gains made toward closing the pay gap, and layoffs and a lack of child care have forced many women out of the workforce entirely. In February 2021, women’s labor force participation rate was 55.8% – the same rate as April 1987. And women of color and those working in low-wage occupations have been the most impacted.

“So what can we do achieve pay equity? There’s clearly a lot of work to be done, but it is possible to level the playing field for working women by increasing transparency around wages across the board, disrupting occupational segregation, expanding access to paid leave and child and elder care, and creating more good union jobs.”

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