DOL Revives Double Damages Awards for Wage Violations
The U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) has given investigators greater discretion in when to seek liquidated damages – double the amount of back pay an employer owes - in pre-litigation settlements for employers’ violations of the overtime or minimum wage provisions of the federal Fair Labor Standards Act (FLSA).FN1 During the Trump administration, investigators were directed to not assess liquidated damages absent clear evidence of an employer’s bad faith and willfulness, or a history of violations by the employer. Investigators also needed approval from the former WHD Administrator and the DOL Solicitor to pursue them. Now, investigators can make a pre-litigation demand for liquidated damages as long as they first get approval from their regional office leader and unless the employer has set forth credible evidence of a good faith defense.
Takeaway
The new DOL policy decreases the likelihood that employers will be able to avoid paying liquidated damages to settle investigations by the DOL before litigation is initiated by the agency or the employee. As such, employers should review their worker exemption classifications and other wage payment practices to avoid paying employees double the amount of earned wages for violations. Please contact the attorneys at Campbell Litigation with questions and for assistance reviewing impacted policies.
FN1 - https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/fab_2021_2.pdf