WASHINGTON (OBV) – The U.S. Department of Labor will no longer pursue payment of liquidated damages against employers for wage violations under the Fair Labor Standards Act.
A field assistance bulletin (FAB) from the Labor Department’s Wage and Hour Division (WHD) recently reiterated Congress’ determination that only a court of law can decide damages in wage and hour investigations.
“The Department further recognizes this limitation based on a fundamental principle of administrative law: a federal agency may act only when Congress has clearly granted it the authority to do so. Congress has not clearly granted the Department the authority to supervise the payment of liquidated damages in administrative matters. Any attempt to do so exceeds the Department’s authority,” Labor Department Administrator Donald Harrison said in the bulletin.
The Trump administration issued Field Assistance Bulletin 2025-3 in late June, rescinding a Biden administration policy that empowered the WHD to pursue liquidated (or double) damages against employers at the administrative investigation stage.
“Historically, the department did not seek liquidated damages in the administrative investigation stage until 2010, when the Obama administration began seeking liquidated damages prior to referral for litigation,” a Labor Department news release states.
The previous Trump administration issued FAB 2020-2 in 2020, placing guardrails on the practice.
The Biden administration issued FAB 2021-2 in 2021, rescinding the 2020 FAB and authorizing the WHD to resume seeking liquidated damages in administrative matters.
The WHD’s new policy benefits employers, according to Dallas-based law firm Jackson Lewis.
“The new WHD policy makes early settlement a significantly more favorable option for employers facing DOL enforcement proceedings. The restriction on RSOLs seeking liquidated damages sharply reduces potential employer exposure and can mean a quicker resolution,” an article by Justin Barnes and Jeffrey Brecher with Jackson Lewis states.
The Labor Department still has the power to seek liquidated damages in lawsuits initiated by the Department of Labor if pre-litigation settlement efforts fail, a factor that employers are advised to consider when negotiating with the agency, according to an Employment Law Worldview blog.
