LinkedIn ordered to pay $6 million in unpaid overtime wages and damages

[Xithras]

4. This has happened to a number of small tech companies.

The problem tends to stem from the same place. Computer software professionals are considered "exempt" employees, which means that they don't get overtime even if they're worked 100 hours a week. Most small technology companies start up with 100% of their employees being overtime exempt.

Eventually the companies hire sales people, telephone support people and other staff to keep the company running as it grows. By that time, the payroll practices have become routine, and the non-exempt new employees get treated just like the existing exempt employees. This usually continues until one of the company lawyers finds out about it, until the company grows enough to establish a real payroll department (staffed with payroll professionals who usually freak out when they realize what their employer has been doing), or until someone sues. It looks like LinkedIn went the third route.