More Changes at DOL: FLSA Liquidated Damages Off the Table During Wage and Hour Investigations

The Trump Administration announced on June 25, 2025, that investigators of the Department of Labor’s (DOL) Wage and Hour Division (WHD) no longer will be authorized to seek the payment of liquidated damages for Fair Labor Standards Act (FLSA) violations during the course of prelitigation investigations. This policy, published in Field Assistance Bulletin 2025.3 is the latest development in the Administration’s roll-back of wage and hour policies implemented by the Biden Administration.

By way of background, the FLSA requires the payment of minimum wages and overtime compensation to employees subject to its coverage. DOL is authorized to investigate potential violations and to “supervise the payment of the unpaid minimum wages or the unpaid overtime compensation owing to any employee or employees.” 29 U.S.C. § 216(c). DOL further is authorized to bring suit “to recover the amount of unpaid minimum wages or overtime compensation and an equal amount as liquidated damages.” Id.

For many years, WHD did not seek the payment of liquidated damages outside of litigation. Rather, if the government found there had been a violation, it would inform the employer of the violation and the amount of backpay that was owed. If the employer accepted the findings and agreed with the amount owed, WHD would supervise the payment of back wages and the agreement of the employees to accept payment and waive their right to pursue claims for the violations and liquidated damages. However, in 2010, the Obama Administration adopted a policy of seeking liquidated damages when attempting to resolve investigations. In other words, the WHD could try to force the employer to not only pay what was owed but to pay an additional amount equal to the backpay that was owed.

Late in its tenure, the first Trump Administration reversed this practice when WHD issued Field Assistance Bulletin 2020-2. WHD stated at the time that the pursuit of liquidated damages got in the way of speedily getting employees paid because employers objected to paying liquidated damages. Unsurprisingly, the Biden Administration reversed FAB 2020-2 and resumed the practice of pursuing liquidated damages.

Fast forward to June 25 and here we are again. The second Trump Administration has reset the policy and will not pursue liquidated damages during pre-litigation efforts to seek payment of unpaid minimum wages or overtime compensation. Notably, WHD has chosen to base its decision on legal, not (necessarily) policy grounds. It has concluded that the FLSA simply does not authorize the pursuit of liquidated damages by WHD outside of litigation. The authority to impose liquidated damages, in its view, resides exclusively in the Courts hearing FLSA cases.

So here’s the new bottom line. If WHD determines that underpayments were made, it won’t demand employers pay liquidated damages above and beyond making the employees whole for underpayments. Employers then will be able to resolve the investigation simply by paying what’s owed (not double what’s owed) if DOL and the employer are in agreement on the amounts due. Of course if they don’t agree, DOL may bring suit, which will mean that the employer could be forced to pay liquidated damages if the Court finds there’s been a violation and that the employer does not have a defense of “good faith.”