In a move that will once again shift the contours of its enforcement powers under the Fair Labor Standards Act (FLSA), the U.S. Department of Labor’s (DOL’s) Wage and Hour Division (WHD) has rescinded Field Assistance Bulletin (FAB) 2021-2, which will curb the scope of damages available to the DOL in the investigatory phase.
As of June 27, 2025, according to FAB No. 2025-3, the DOL will no longer seek, supervise, or facilitate the payment of liquidated damages in any pre-litigation or administrative matter.
This policy reversal marks a return to the plain statutory limits of § 216(c) of the FLSA, which permits the DOL to supervise only the recovery of unpaid minimum wages and overtime compensation, not liquidated damages. Liquidated damages in relation to DOL investigations are a statutorily authorized form of double damages. For example, a DOL investigation can lead to the finding of an unpaid or overtime wage violation by an employer for a certain amount. Liquidated damages provisions typically double that amount and act as a penalty for failing to comply with wage and hour laws.
Numerous policy shifts on this issue have occurred over the last few decades. Initially, the WHD and its regional offices pursued liquidated damages only through litigation or settlements tied to a filed case. However, in 2010, this changed when the DOL began expanding its scope, asserting authority to obtain liquidated damages during the administrative investigation phase. The DOL codified this in its Field Assistance Bulletin, FAB 2021-2, allowing the WHD — with approval from regional solicitors — to routinely request liquidated damages during official wage investigations.
However, in this change, the DOL is taking a narrower approach and interpretation of these administrative law principles. While employees may recover liquidated damages through private lawsuits under § 216(b) or when the DOL initiates litigation, under the Agency’s current interpretation of the statutory framework, liquidated damages as a form of recompense are reserved only for judicial proceedings.
Looking ahead, DOL investigators and attorneys are instructed to steer clear of any form of pre-litigation engagement over liquidated damages. This includes not only formal requests but also any indirect “encouragement, leveraging, or support.” While the WHD retains full authority to recover unpaid wages through supervision, any case involving liquidated damages must now head to court. Employers and counsel should take note: Unless litigation is filed, liquidated damages are off the table.
For matters resolved before June 27, 2025, where liquidated damages were agreed to in writing, this shift has no retroactive effect. But going forward, DOL’s enforcement priorities will reflect a narrower reading of its statutory authority.
However, for employers, the best way to resolve a wage and hour issue is to take the necessary preventative action before one occurs. Employers Council can provide a wealth of tips, legal advice, relevant information, and training courses to reduce the risk of a DOL investigation. If you have questions about how this shift in enforcement authority will affect your business or questions or concerns in general about wage and hour issues, please reach out to an Employers Council attorney.
Timothy Rosini is an attorney for Employers Council.