The US Department of Labor (DOL) has announced it will once again seek “double damages” when it negotiates settlements with employers it believes have violated the law.
When DOL investigators determine that an employer has violated the FLSA, they usually first try to reach a voluntary settlement with the employer. This generally involves paying back wages for two years and agreeing to pay wages in accordance with the FLSA in the future. Under the Obama administration, the DOL also began seeking liquidated damages of an amount equal to the amount of unpaid compensation due under the statute, which most of the time, in effect doubles the amount of back wages to which employees are entitled.
Under the Trump administration, the DOL announced it would no longer assess pre-litigation liquidated damages in many cases.
Now, under the Biden administration, the DOL is making another 180-degree turn. In an enforcement bulletin published on April 9, the DOL said it will return to pursuing liquidated damages in its pre-litigation investigations as long as the Regional Solicitor (RSOL) or their designee agrees with the request.
The DOL will not assess liquidated damages if the employer presents credible evidence of a good-faith defense or if the RSOL decides the matter is not appropriate for litigation.
Next Steps for Employers
Employers should review their wage and hour practices to ensure that their employees are properly classified as exempt or non-exempt and that the correct minimum wage and overtime rates are being paid to employees. Employers should also ensure that their wage and hour and recordkeeping practices are compliant with both federal and state law.