DOL Rescinds Authority to Seek Liquidated Damages in Pre-Litigation Wage Investigations
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APPLIES TO All Employers |
EFFECTIVE June 27, 2025 |
QUESTIONS? Contact HR On-Call |
Quick Look
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Discussion
On June 27, 2025, the U.S. Department of Labor’s Wage and Hour Division (WHD) issued Field Assistance Bulletin No. 2025-3 (FAB 2025-3), formally rescinding FAB 2021-2 and clarifying that WHD may no longer seek or supervise the payment of liquidated damages in any administrative matter under the Fair Labor Standards Act (FLSA). This policy change applies prospectively and is effective immediately.
FAB 2025-3 reaffirms that under FLSA Section 216(c), WHD is authorized only to supervise the payment of unpaid minimum wages or overtime compensation, which does not include liquidated damages. The bulletin emphasizes that liquidated damages are a judicial remedy, available only through litigation under Section 216(b), where courts have the authority to assess whether such damages are appropriate, particularly in light of an employer’s good faith defense under Section 260.
WHD concluded that the absence of statutory language authorizing the Department to supervise payment of liquidated damages in administrative matters precludes this type of action. As a result, WHD will no longer request, negotiate, or accept liquidated damages in any pre-litigation resolution of wage and hour violations. This allows employers under WHD investigation to resolve wage disputes administratively without the added burden of liquidated damages.
Action Items
- Consult with legal counsel on settlement strategy in WHD investigations.
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