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On June 27, the Department of Labor’s (DOL’s) Wage and Hour Division (WHD) issued a new Field Assistance Bulletin (FAB) regarding wage and hour investigations. Specifically, FAB 2025-3 advises agency field investigators that the WHD will no longer request or attempt to collect liquidated damages in certain situations. These instances are related to the pre-litigation resolutions of wage and hour investigations involving unpaid minimum wages and overtime compensation. Earlier, in May 2025, the DOL stopped previous agency efforts to restore the 2024 Overtime Protections Minimum Salary Rule.
The History of Liquidated Damages and Wage and Hour Investigations
Basically, according to Littler, prior to 2010, the WHD did not typically seek liquidated damages in wage and hour matters resolved prior to litigation. However, in 2010, the agency began to add on the liquidated damages. The WHD continued this practice until 2020, when the first Trump administration stopped the practice. Chiefly, the DOL at that time believed that seeking liquidated damages would delay wage recovery for employees. This was due to the fact that employers would fight against the additional damages, and the case resolution of wage and hour investigations would be prolonged. By comparison, in 2021, the DOL under the Biden administration resumed the practice of demanding liquidated damages. With the return of the Trump administration, the WHD is once again stopping the practice of liquidated damages. Markedly, though, this will only occur as part of pre-litigation supervised payments of unpaid minimum wages or overtime compensation.
As has been noted, in 2020, the Trump administration halted liquidated damages due to delays in worker payments. Correspondingly, the current administration states that it is stopping the practice because the DOL is not legally authorized to seek liquidated damages under the Fair Labor Standards Act (FLSA).
Overview of the Fair Labor Standards Act
The FLSA is the nation’s primary wage law and one of the major employment laws employers must follow. Explicitly, the FLSA establishes minimum wage and overtime protections for non-exempt part-time and full-time employees. However, under section 13(a)(1) of the FLSA, employees paid above the FLSA’s current salary basis are generally exempt from overtime provisions. To qualify for overtime exemption, employees must have been paid on a salary basis at not less than $684 per week. These exempt employees must also perform at least one of the duties of an executive, administrative, or professional employee.
Also, every covered employer must keep certain records for each covered employee. Records do not have to be in a particular form. However, they must include the following information:
- specific identifying information about the employee,
- data on hours worked,
- pay rate, and
- wages earned.
Employer Takeaways
In conclusion, the release of FAB 2025-3 is good news for employers who are subject to wage and hour investigations. Particularly, employers who are charged with unpaid minimum wages or overtime compensation. In the long run, employers who choose to resolve such accusations prior to any litigation proceedings will save time, effort, and money by avoiding liquidated damages. However, any businesses facing wage and hour investigations should consult with legal counsel and choose the course of action that’s right for the specific situation.
