Under the Fair Labor Standards Act, employers found liable for failure to pay overtime or minimum wages can be assessed liquidated damages in an amount equal to the unpaid wages. Prior to the Trump administration, the U.S. Department of Labor frequently sought payment of such damages as a condition of settling administrative wage payment investigations. The Trump DOL suspended this practice, only asking for liquidated damages if it was forced to litigate the claim in federal court.

On April 9, DOL rescinded this guidance, basically reinstating the prior practice of seeking payment of liquidated damages on a case-by-case basis. DOL must receive approval from the regional administrator before assessing liquidated damages. The agency said that it will not assess such damages where the employer has a good faith defense with regard to its failure to pay legally required wages. This change will make it more expensive – and in some cases more difficult – to settle administrative wage investigations.