The Department of Labor’s Wage and Hour Division has returned to its policy of not seeking liquidated damages in pre-litigation settlements of Fair Labor Standards Act claims.
Under the FLSA, liquidated damages may effectively double the amount due to non-exempt employees for violations such as worker misclassification or off-the-clock work. Recent Democratic administrations sought liquidated damages, in addition to back pay, at the settlement stage to increase workers’ financial recoveries. DOL now argues that the FLSA authorizes liquidated damages only during litigation.
DOL’s current policy should make it easier for employers to settle alleged violations with DOL. However, it is possible that plaintiffs’ attorneys will advise clients to seek redress in court rather than through DOL.
Members of the Center for Workplace Compliance (CWC), our affiliated nonprofit membership association, can read more here.