On June 27, 2025, the U.S. Department of Labor (“DOL” or the “Department”) issued Field Assistance Bulletin No. 2025-3, in which it prohibits Wage and Hour Division (“WHD”) field staff from seeking liquidated damages in pre-litigation settlements of Fair Labor Standards Act (“FLSA”) claims.
Under the FLSA, non-exempt employees—meaning those who are not paid a sufficiently high salary and/or do not perform exempt administrative, professional, executive, outside sales, or certain computer-related functions—must be paid minimum wage and one-and-one-half times their regular rate of pay for hours worked in excess of 40 hours in a workweek. Employees who contend their employer failed to comply with these obligations may file a lawsuit in court or bring administrative wage claims before the DOL. Under the FLSA, employees who were unlawfully underpaid minimum wage, overtime compensation, or both, may be awarded not only their underpaid wages but also an additional amount equal to the underpayment as liquidated damages.
The DOL’s instruction to WHD field staff not to seek liquidated damages in prelitigation settlements of FLSA wage claims reflects its interpretation that the FLSA only permits the award of liquidated damages in judicial proceedings, not in pre-litigation settlements supervised by the administrative agency. As Acting Administrator Donald M. Harrison stated in the Bulletin:
The Department further recognizes this limitation based on a fundamental principle of...
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