The Federal Fair Labor Standards Act (“FLSA”) is a federal law that establishes a standard minimum wage and overtime pay for eligible employees. The FLSA also provides that employers who violate its requirements can be held liable for liquidated (double) damages. In other words, if an employer shorts an employee $100 in overtime pay, it faces a potential $200 liability.
The U.S. Department of Labor (“DOL”) is the federal agency responsible for enforcing the FLSA. Sometimes on its own initiative, and sometimes in response to a complaint, the DOL will audit a business. In years past, if the DOL determined the business owed workers unpaid wages, the DOL sought to have the offending business pay out those wages, plus an equal amount as liquidated damages. As of June 27, 2025, that practice has come to an end.
On that date, the DOL, under the Trump administration, issued a Field Assistance Bulletin advising that the agency would no longer seek liquidated damages at the investigation stage. Note that this has become somewhat of a political issue, with Democratic administrations enforcing the FLSA’s liquidated damages provisions and Republican administrations not doing so. This recent change marks the latest swing of the pendulum.
Note that the prohibition on seeking liquidated damages exists only at the administrative/investigative stage. Businesses that litigate FLSA cases in court still face the threat of liquidated damages in the event of an adverse verdict. The result of this dynamic is that businesses that disagree with DOL investigative findings will face an interesting dilemma – either pay what the DOL says is owed, or take their chances in court and risk a verdict for twice the amount.
