On June 27, 2025, the U.S. Department of Labor (“DOL”) announced a significant shift in its wage and hour enforcement policy, ending the longstanding practice of seeking liquidated damages in administrative, prelitigation proceedings under the Fair Labor Standards Act (“FLSA”). This move, outlined in Field Assistance Bulletin (FAB) No. 2025-3, represents a marked change in regulatory approach and has immediate implications for employers, employees, and the broader employment law community. The change is intended to bring the DOL’s enforcement activities back in line with its statutory authority while streamlining the resolution of wage and hour investigations.
In the context of the FLSA, liquidated damages refer to an additional sum of money, equal to the amount of unpaid wages or overtime compensation owed to an employee, awarded as compensation for delayed payment. Liquidated damages are distinct from punitive damages and serve to ensure prompt and full wage payment to employees.
Ostensibly, the purpose of liquidated damages is to compensate workers for losses that arise from the employer’s failure to pay the required wages on time, and not merely to penalize employers. If an employer was found to have violated minimum wage or overtime requirements, the law provides that the affected employee is entitled to recover both the unpaid wages and an equal amount in liquidated damages, unless the employer can demonstrate that the violation was made...
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