The U.S. Department of Labor's Wage and Hour Division has announced a significant policy change regarding the collection of liquidated damages under the Fair Labor Standards Act (FLSA). According to a new field assistance bulletin, the division will no longer seek or collect these damages in administrative matters.
The bulletin emphasizes that Congress intended for such damages to be addressed through judicial proceedings, with responsibility resting on the courts rather than the Department of Labor. This marks a return to practices prior to 2010 when the department began pursuing liquidated damages during administrative investigations under the Obama administration.
In 2020, the Trump administration introduced FAB 2020-2 to restrict this practice, which was seen as controversial and legally questionable. However, in 2021, the Biden administration rescinded this guidance with FAB 2021-2, allowing for discretion in seeking liquidated damages administratively.
With today's issuance of FAB 2025-3, the division will cease seeking these damages in administrative proceedings. The department believes that ending this practice will lead to more effective dispute resolution and fairer outcomes for both workers and businesses.
For further information beyond the field assistance bulletin, workers and employers are encouraged to contact the Wage and Hour Division through its toll-free helpline at 866-4US-WAGE (487-9243).
