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DOL Wage and Hour Division changes FLSA liquidated damages policy

7/3/25

By: Thomas R. Starks

On June 27, 2025, the U.S. Department of Labor’s Wage and Hour Division (“DOL”) issued a Field Assistance Bulletin, marking a major shift in enforcement under the Fair Labor Standards Act (“FLSA”). Effective immediately, DOL staff are prohibited from seeking or collecting liquidated damages during administrative investigations and settlements. This does not impact employees’ ability to pursue liquidated damages in court. 

Under the FLSA, if an employer fails to pay a non-exempt employee the required minimum wage or overtime, affected employees are entitled to back pay plus an additional equal amount as liquidated damages—essentially “double damages.” Before 2010, these damages were only awarded through the courts. Beginning in 2010, an Obama-era policy allowed the DOL to pursue them during administrative settlements. This policy has bounced back and forth over the past five years. 

Proponents of the new policy believe the pursuit of liquidated damages prolongs investigations. Additionally, their legal argument is that the sections liquidated damages fall under are reserved for judicial proceedings. The DOL still has the authority to pursue litigation, when necessary, which would then allow the DOL to seek liquidated damages.  

This is a welcome update for employers navigating audits. It also underscores the ongoing importance of practices that comply with wage and hour laws—especially because employees are not required to exhaust administrative remedies prior to pursuing costly lawsuits that can include liquidated damages and costly attorneys’ fees. 

For more information, please contact Thomas Starks at thomas.starks@fmglaw.com or your local FMG attorney.

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