DOL Ends Liquidated Damages Demands in Wage and Hour Investigations

The U.S. Department of Labor’s Wage and Hour Division (WHD) has pulled back a powerful settlement lever. In Field Assistance Bulletin 2025-3, issued on June 27, 2025, the agency announced that investigators may no longer request or collect liquidated damages during any administrative investigation or pre-litigation settlement under the Fair Labor Standards Act (FLSA). The move takes immediate effect and rescinds FAB 2021-2, restoring the Department’s earlier view that section 216(c) authorizes WHD to supervise payments only of unpaid minimum wages and overtime compensation. dol.govdol.gov

A brief history and the legal pivot

For a decade beginning in 2010, WHD routinely doubled back-wage assessments by adding liquidated damages to settlement demands. Concerned that the practice lengthened investigations and delayed worker restitution, the Department suspended it in 2020, revived it in 2021, and now rejects it again in 2025. FAB 2025-3 reasons that Congress reserved the liquidated-damages remedy for courts and litigated settlements, not for agency-supervised resolutions. dol.govdol.gov

What this means for Florida employers

Eliminating liquidated damages can lower potential exposure in a WHD investigation by as much as 100% of back wages. Employers who resolve matters administratively now face liability limited to back wages and any civil money penalties the agency may assess. Liquidated damages remain on the table only if the Department files suit or if an employee brings a private action. The Florida Minimum Wage Act similarly provides for liquidated damages only through litigation, so state law does not add an extra layer of risk at the administrative stage.

Florida businesses should review any open WHD cases to ensure that pending settlement proposals exclude liquidated damages. They should also audit time-keeping systems for FLSA compliance, preserve documentation showing good-faith efforts to comply with wage laws, and train managers on overtime, travel time, and off-the-clock work to prevent future violations.