Last Updated on September 12, 2025 by MyHRConcierge

On June 27, 2025, the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) issued Field Assistance Bulletin No. 2025-3, significantly altering its enforcement approach to wage and hour violations under the Fair Labor Standards Act (FLSA). The new guidance limits the WHD’s authority to pursue liquidated damages in administrative settlements, reshaping how employers and investigators resolve wage-related disputes outside of court.

This policy shift may help reduce settlement burdens for employers and encourage more cooperative resolutions during compliance investigations. However, it also leaves the door open for continued liability in litigation.

Key Takeaways from the New 2025 DOL Wage and Hour Investigation Policy

No Liquidated Damages in Administrative Resolutions

The WHD will no longer request or collect liquidated damages- commonly referred to as “double damages”- when resolving FLSA violations through administrative proceedings. This includes cases in which the WHD supervises the payment of back wages under FLSA § 216(c).

Previously, the DOL often sought liquidated damages alongside back wages in these administrative settlements. With this change, employers resolving disputes through the WHD will only be required to repay the unpaid minimum wage or overtime compensation owed, without an additional penalty unless the matter proceeds to litigation.

Liquidated Damages Still Available in Litigation

Employers should note that liquidated damages are still available in court actions brought under FLSA § 216(b). If an employer is sued by the DOL or a private party, courts may award liquidated damages unless the employer can demonstrate that the wage violation occurred in good faith and with reasonable grounds for believing it was not violating the FLSA. This defense is permitted under FLSA § 260.

In other words, the elimination of liquidated damages only applies to pre-litigation settlements. Employers found liable in court still face the potential for double liability unless they meet the good faith standard.

Not Retroactive

FAB 2025-3 applies only to investigations and settlements occurring on or after June 27, 2025. Any previous settlements that included liquidated damages are not affected by this policy change.

Why the DOL Wage and Hour Investigation Policy Changed

According to the DOL, the revised guidance reflects a strict interpretation of the FLSA’s statutory language. Under § 216(c), the WHD is only authorized to supervise the payment of unpaid wages- not liquidated damages. The DOL concluded that the authority to impose liquidated damages in these situations rests exclusively with the courts.

Additionally, WHD data shows that investigations involving liquidated damages took approximately 28% longer to resolve than those that did not. By limiting its scope to unpaid wages, the WHD aims to streamline its enforcement process, reduce delays and promote faster resolution of worker claims.

What Employers Should Do Now

This policy shift provides employers with a greater incentive to resolve wage and hour disputes early in the administrative process. However, it also underscores the importance of:

• Ensuring wage and hour compliance to avoid litigation risks.
• Training HR teams and managers on FLSA classifications, recordkeeping and overtime rules.
• Documenting compliance efforts in the event that litigation occurs and a good-faith defense becomes necessary.

Employers should also monitor state wage and hour laws, which may have different requirements and remedies- including the availability of penalties or liquidated damages even in non-litigation settings.

FLSA Compliance

The DOL’s new enforcement policy represents a meaningful change for employers navigating federal wage and hour investigations. By removing liquidated damages from the scope of administrative settlements, the WHD is signaling a more streamlined, less punitive approach to compliance- at least, prior to litigation.

Still, employers should not view this as a reduction in risk. Violations that result in court action may still lead to substantial financial exposure. Proactive compliance, clear policies and early engagement in any WHD investigation remain essential to minimizing liability.