On June 27, 2025, the U.S. Department of Labor (DOL) issued Field Assistance Bulletin No. 2025-3 directing that its Wage and Hour Division (WHD) will no longer seek liquidated damage payments in pre-litigation wage and hour investigations. Effective June 27, 2025, WHD must limit recovery payments to unpaid wages and overtime compensation. 

What Changed?

Previously, WHD awarded liquidated damages to employees who were not properly paid minimum wage or overtime compensation, which was an additional amount equaling back wages or unpaid compensation owed, or “double damages.” This resulted in employers having to pay at least double the amount of unpaid wages owed to employees.

Going forward, in any pre-litigation proceeding, WHD will not order liquidated damages against employers. Instead, employers will pay damages limited to the amount of unpaid wages owed.

Why Did this Change?

The DOL explained that the Fair Labor Standards Act (FLSA) only authorizes the WHD to award “payment of the unpaid minimum wages or the overtime compensation owing to any employee” and does not allow the WHD to “recover liquidated damages except where an enforcement action is brought in litigation.” In other words, the DOL believes that FLSA does not authorize the WHD to seek liquidated damages in pre-litigation investigations.

What Should Employers Do?

Employers should continue to comply with both federal and state wage and hour rules and regulations, regardless of the DOL’s updated enforcement guidelines. Liquidated damages can still be assessed via a court order or settlement during litigation, civil fines and penalties may apply, and state laws remain in effect.  In addition, noncompliance can lead to very time-consuming investigations, employee complaints, poor morale, and reputational harm.

HEC members may contact their HR Consultant with questions regarding wage and hour laws, investigations, and audits.

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