DOL Seeking Liquidated Damages in Lieu of Litigation : vimar

DOL Seeking Liquidated Damages in Lieu of Litigation


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DOL Returns to the Practice of Seeking Liquidated Damages in Settlements in Lieu of Litigation, Rescinding Trump-Era Policy (US)
Tuesday, April 13, 2021
On April 9, 2021, the U.S. Department of Labor (“DOL”) issued Field Assistance Bulletin No. 2021-2, which provides updated guidance to Wage and Hour Division (“WHD”) field staff regarding the practice of seeking liquidated damages in settlements in lieu of litigation. In so doing, the DOL rescinded a Trump-era policy aimed at reducing the imposition of liquidated damages in wage cases.
It is well-established that under the Fair Labor Standards Act (“FLSA”), employers who violate the provisions of the FLSA involving minimum wages, overtime compensation, and protections for employees who receive tips are liable for the unpaid wages or unlawfully kept tips and for an additional equal amount as liquidated damages – in other words, double damages. Prior to June 23, 2020, it had been the policy of WHD to seek liquidated damages in pre-litigation settlements only in certain cases upon agreement by the Solicitor’s Office. As we reported in a previous blog post, this policy was revised by the Trump Administration pursuant to a June 2020 memorandum from the Deputy Secretary in which the DOL announced that it would no longer automatically pursue pre-litigation liquidated damages in administrative actions. The change in practice was based on President Trump’s Executive Order 13924, Regulatory Relief to Support Economic Recovery, and FAB 2020-2, issued on June 24, 2020. At that time, the stated goal of the policy change was to remove certain regulatory and enforcement barriers to economic gains as America tried to rebuild from the devastating economic effects of COVID-19.

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