The U.S. Department of Labor will no longer seek liquidated damages during administrative wage and hour investigations, ending a practice that has shifted between presidential administrations over the past 15 years.
The department’s Wage and Hour Division issued a field assistance bulletin Wednesday clarifying that it cannot seek or collect liquidated damages in administrative matters under the Fair Labor Standards Act. The bulletin states that Congress reserved such damages for court proceedings, not administrative investigations.
Policy shifts across administrations
The department historically did not pursue liquidated damages during the investigation stage until 2010, when the Obama administration began seeking such damages before cases went to court.
The Trump administration issued guidance in 2020 that placed restrictions on the practice. The Biden administration then rescinded that guidance in 2021 and authorized the division to again seek liquidated damages in administrative matters.
The new bulletin, designated FAB 2025-3, eliminates the division’s ability to pursue such damages during administrative proceedings.
Impact on employers and workers
The change affects how the department handles wage and hour violations during the investigation phase, before cases are referred for litigation. Liquidated damages typically equal the amount of unpaid wages owed to workers.
The department said ending this practice will improve dispute resolution and create more fair and timely outcomes for workers and businesses.
Background on liquidated damages
Under the Fair Labor Standards Act, employers who violate wage and hour laws may owe workers both back wages and an equal amount in liquidated damages. The law allows courts to award these damages in addition to unpaid wages.
The debate over when the Labor Department can seek these damages centers on whether the agency has authority to pursue them during administrative investigations or only after cases reach federal court.
Workers and employers seeking guidance can contact the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE.
