Monday, April 12, 2021: Employers Beware – Liquidated Damages Under FLSA Have Returned
In a blog post, “Liquidated Damages in Settlements in Lieu of Litigation,” Jessica Looman, Principal Deputy Administrator for the U.S. Department of Labor’s Wage and Hour Division (WHD), announced that effective April 9, 2021 the Agency returned to pursuing pre-litigation liquidated damages.
Under the Fair Labor Standards Act (FLSA), employers which violate the Act’s provisions concerning minimum wages, overtime compensation, and protections for employees who receive tips are liable for unpaid wages or unlawfully kept tips and for an additional equal amount as liquidated damages—often called “double damages.” (29 U.S.C. § 216(b),§ 216(c)).
Before June 23, 2020, the WHD sought liquidated damages in particularly egregious cases of intentional violations upon the concurrence of the Solicitor’s Office. But then President Trump issued Executive Order 13924, Regulatory Relief to Support Economic Recovery (May 2020). This was an Order to federal Executive Branch agencies to reduce the regulatory impact on businesses in America during the COVID-19 pandemic. On behalf of the WHD doing its part, then WHD Administrator Cheryl M. Stanton issued Field Assistance Bulletin 2020-2 dated June 24, 2020. Now, skip forward 7 months to President Biden’s February 24, 2021 revocation of EO 13924. And, now we are back to where we began with Ms. Looman now rescinding Field Assistance Bulletin 2020-2 (now stripped from WHD’s website) and replacing it with Field Assistance Bulletin 2021-2.
According to this new FAB, “…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.”
Per the FAB, the assessment of liquidated damages instead of litigation will occur on a case-by-case basis. WHD may not make a demand for liquidated damages without first obtaining concurrence from the RSOL or designee. WHD will not assess liquidated damages where the employer has set forth credible evidence of a good faith defense or where the RSOL deems the matter inappropriate for litigation.