A representative of the company said the incident happened due to technical error.
LinkedIn will pay more than $3m in overtime back wages and above $2.5m in liquidity damages to 359 of its former and current employees from New York, California, Illinois and Nebraska, after it was found to be violating the US wage law.
The US Department of Labor found that LinkedIn did not record the total work hours completed by each employee in its offices across the country, which is a violation of the the Fair Labor Standards Act.
The professional networking site has also entered into an agreement with the Department Of Labor to provide training to all non-exempt employees and their managers about off-the-clock work regulations.
US Department of Labor administrator of Wage and Hour Division Dr. David Weil said: "This company has shown a great deal of integrity by fully cooperating with investigators and stepping up to the plate without hesitation to help make workers whole."
"We are particularly pleased that LinkedIn also has committed to take positive and practical steps towards securing future compliance."
Wage and Hour Division's San Francisco district director Susana Blanco said: "Off the clock hours are all too common for the American worker.
"This practice harms workers, denies them the wages they have rightfully earned and takes away time with families.
"We urge all employers, large and small, to review their pay practices to ensure employees know their basic workplace rights and that the commitment to compliance works through all levels of the organisation."
LinkedIn reportedly mailed the settlement to the affected employees.