Most California employers do not get investigated by the United States Department of Labor (“USDOL”) because wage and hour enforcement in California is generally covered by the California Labor Commissioner and plaintiffs in class and PAGA cases, given the fact that state law wage and hour requirements are much more onerous than the federal wage and hour requirements. However, occasionally DOL will conduct audits and investigations of California employers in response to employee complaints. Recently, one of my clients was investigated for alleged FMLA violations.
Earlier today, the Wage and Hour Division of the USDOL issued a press release and field assistance bulletin prohibiting the USDOL from seeking liquidated damages in any pre-litigation investigation. In addition, these pronouncements also prohibit the USDOL from recovering liquidated damages as part of any settlement/resolution of any pre-litigation matter. While USDOL retains the right to seek liquidated damages in judicial proceedings where it files suit against employers for violating federal labor laws, it will no longer do so in pre-litigation proceedings, investigations and settlements.
The practice of seeking liquidated damages against employers in administrative investigations and settlements started under President Obama. It was discontinued under the first Trump administration, but renewed again under Biden. This is a positive development for employers being investigated by the USDOL for potential federal wage and hour violations and violations of other federal labor laws (like FMLA) under the jurisdiction of the USDOL.
