DOL Revives Double Damages

On April 9, 2021, the DOL’s Wage and Hour Division (WHD) issued Field Assistance Bulletin 2021-2, revoking a Trump administration policy that reduced the pre-litigation amount employers would have to pay to settle violations of the Fair Labor Standards Act (FLSA) by downplaying the use of liquidated damages in settlement discussions.

Under the FLSA, employers that violate FLSA provisions regarding minimum wages, overtime compensation, and protections for employees who receive tips are liable for the unpaid wages or unlawfully kept tips as well as an additional equal amount as liquidated damages (i.e., double what an employer owes). 

Prior to June 23, 2020, it had been the policy of WHD to seek liquidated damages in certain cases. This policy was changed based on a June 23, 2020 memorandum from the Deputy Secretary following the issuance of Executive Order 13924, Regulatory Relief to Support Economic Recovery. In FAB 2020-2, the DOL announced that it would no longer be seeking pre-litigation liquidated damages except in cases where there was “clear evidence” of bad faith or a history of violations by the employer.

With the issuance of FAB 2021-2, the WHD will return to pursuing liquidated damages from employers found due in its pre-litigation investigations provided that the Regional Solicitor (RSOL) or designee concurs with the liquidated damages request.

According to FAB 2021-2, “Liquidated damages shall not be assessed by WHD where the employer has set forth credible evidence of a good faith defense,” or the where the regional solicitor “deems the matter inappropriate for litigation.”

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 678-439-6236.

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