On June 27, 2025, the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) issued Field Assistance Bulletin (FAB) 2025-3, clarifying that it will not seek or collect the payment of liquidated damages in any pre-litigation investigation or resolution of wage and hour investigations for unpaid minimum wages and overtime compensation under the Fair Labor Standards Act (FLSA).

Background

Under the FLSA, nonexempt employees must be paid minimum wage and 1.5 times their regular rate of pay for hours worked in excess of 40 hours in a workweek. Employees may pursue unpaid wages by filing a lawsuit or bringing an administrative wage claim before the DOL. Under the FLSA, employees who were not paid minimum wage or overtime compensation, or both, may be awarded their unpaid wages plus an additional equal amount as liquidated damages.

Historically, the DOL’s solicitor of Labor (SOL) and its regional solicitors (RSOL) have sought liquidated damages when resolving FLSA violations through litigation or litigation-related settlement. However, in 2010, the WHD began to seek liquidated damages in the administrative investigation stage. This practice continued until 2020, when the DOL issued FAB 2020-2, which temporarily curtailed the practice. Subsequently, in 2021, FAB 2020-2 was rescinded by FAB 2021-2, which explicitly authorized the WHD, with concurrence from RSOLs, to seek liquidated damages in administrative matters under the FLSA.

Key Highlights

FAB 2025-3 ends the WHD’s ability to seek liquidated damages in administrative proceedings under the FLSA. According to the FAB, Section 216(b) of the FLSA authorizes employees and the SOL to bring private lawsuits to recover unpaid minimum wages and overtime compensation and provides for “an additional equal amount as liquidated damages.” Under Section 216(c) of the FLSA, only the SOL is authorized to “supervise the payment of the unpaid minimum wages or the unpaid overtime compensation owing to any employee or employees under section 206 or 207” prior to the initiation of litigation. Section 260 confirms that liquidated damages are reserved for judicial proceedings. Further, the FAB states that the DOL recognizes that Congress has not clearly granted the department the authority to supervise the payment of liquidated damages in administrative matters, and any attempt to do so would exceed the DOL’s authority.

Highlights

• The WHD issued FAB 2025-3, clarifying that it will not seek or collect the payment of liquidated damages in any pre-litigation investigation or resolution of wage and hour investigations for unpaid minimum wages and overtime compensation under the FLSA.
• FAB 2021-2, which authorized the WHD to supervise the payment of liquidated damages in administrative matters, is withdrawn effective June 27, 2025.
• The policy change contained in FAB 2025-3 applies prospectively and does not affect matters where liquidated damages have been agreed to in writing before June 27, 2025.

This Bulletin is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. Design ©2025 Zywave, Inc. All rights reserved.