DOL Wage and Hour Division to No Longer Seek Liquidated Damages

Quick Hits

• The WHD issued field assistance instructing regional solicitors (RSOLs) to stop seeking liquidated damages in administrative matters over unpaid minimum wage and overtime.
• The field assistance states that the WHD has determined that the FLSA does not authorize the secretary of labor to seek liquidated damages unless the division files a lawsuit, a change to recent enforcement.
• The policy change took effect on June 27, 2025, and applies prospectively.

Field Assistance Bulletin (FAB) No. 2025-3 clarifies that the WHD may not supervise the payment of liquidated damages in any administrative matter under the FLSA. According to the field assistance, the DOL has determined that the FLSA “does not authorize the [DOL] to compromise claims for or recover liquidated damages except where an enforcement action is brought in litigation.”

The field assistance instructed regional solicitors (RSOLs) to limit supervised payments to “the recovery of unpaid minimum wages or overtime compensation” and not to “request liquidated damages in any pre-litigation investigation or resolution.”

Background and Rationale

Section 216(c) of the FLSA authorizes the secretary of labor to supervise the payment of unpaid minimum wages or overtime compensation owed to employees. If an employee agrees to accept a payment, it constitutes a waiver of the employee’s right to sue for unpaid wages and an equal amount in liquidated damages.

Historically, the WHD has sought liquidated damages for employees through litigation or litigation-related settlements. However, in 2010, the WHD began to include liquidated damages in the administrative investigation stage, a practice that was later expanded and then curtailed in 2020.

“Upon reconsideration, the [DOL] believes WHD is not authorized to seek liquidated damages as part of any payment it supervises under § 216(c) and WHD will discontinue engaging with RSOLs on this issue,” the field assistance stated.

The DOL’s conclusion is based on the principle that a federal agency can only exercise authority clearly delegated by the U.S. Congress, the field assistance stated. Since the FLSA explicitly mentions liquidated damages only in the context of judicial proceedings, WHD may only seek such damages in litigation, the field assistance stated.

Implications for Enforcement

The field assistance states that RSOLs may not seek liquidated damages in any administrative matters before the filing of a lawsuit, including “seeking, pursuing, imposing, accepting, endorsing, approving, encouraging, leveraging, or otherwise supporting in any way the payment of liquidated damages.”

However, RSOLs may still seek liquidated damages when filing a lawsuit. These damages are available through employee lawsuits or litigation initiated by the secretary of labor, provided the employer does not prove good faith and reasonable grounds for its actions.

Next Steps

The issuance of FAB No. 2025-3 marks a return to a more restrictive interpretation of the WHD’s authority under the FLSA. By limiting the WHD’s role to supervising the payment of unpaid minimum wage and overtime, the DOL aims to streamline administrative processes and ensure compliance within statutory limits.

The policy is effective from June 27, 2025, and applies prospectively. The field assistance does not affect matters where liquidated damages have been agreed to in writing before this date.

Ogletree Deakins’ Wage and Hour Practice Group will continue to monitor developments and will provide updates on the Wage and Hour blog as additional information becomes available.

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