The United States Department of Labor (“DOL”) issued a Field Assistance Bulletin (“FAB”) on June 27, 2025, putting to bed, hopefully once and for all, the DOL’s unauthorized practice of requiring employers to pay liquidated damages in pre-litigation wage and hour matters. For years, during administrative investigations, the DOL would seek to impose, and/or threaten litigation over the imposition of, liquidated damages when it found violations of the Fair Labor Standards Act (“FLSA”). Not anymore.
Snapshot Update: The DOL’s Wage and Hour Division (“WHD”) issued FAB No. 2025-3, effective June 27, 2025, rescinding prior guidance and clarifying that WHD may not supervise or seek liquidated damages in administrative settlements under the FLSA. This policy change limits WHD’s authority in pre-litigation matters to the pursuit of unpaid minimum wages and overtime compensation only. Liquidated damages are now reserved exclusively for judicial proceedings.
Background: Historically, the WHD sought liquidated damages in FLSA enforcement actions resolved through litigation. However, beginning in 2010, during the Obama administration, the WHD expanded this practice to include administrative investigations.
Subsequent review determined that the FLSA does not authorize the DOL to supervise or recover liquidated damages outside of litigation, meaning that the DOL is prohibited from seeking or otherwise supporting the payment of liquidated damages in any administrative matter, including all pre-litigation investigations and resolutions. This quote from the FAB sums it up: “The [DOL] 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 [DOL’s] authority.” (Emphasis added.)
Conclusion: The DOL’s revised enforcement position aligns with statutory limitations and reaffirms that liquidated damages are available only through judicial proceedings—confirming that the FLSA does not authorize the DOL to do otherwise. The DOL’s role in administrative settlements is now strictly limited to the evaluation and recovery for employees of unpaid minimum wages and overtime compensation, with liquidated damages reserved for court actions.
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