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DOL COVID-19 UPDATE: Collecting Liquidated Damages on Back Wages

DOL COVID-19 UPDATE: Collecting Liquidated Damages on Back Wages

The U.S. Department of Labor (DOL) issued a Bulletin on June 24, 2020 holding back the Department of Labors' requirements in bringing an action to recover liquidated damages in settlements due to unpaid wages or overtime compensation.

This Regulatory Relief effective July 1, 2020 is due to the COVID-19 pandemic and designed to help small business that are going into pre-litigation settlements of wage claims.

Specifically, Field Assistance Bulletin No. 2020-2 declares that in order to return back wages to affected employees as soon as possible the Department of Labor will no longer seek pre-litigation liquidated damages from employers due to Fair Labor Standards Act (FLSA) violations.


This comes from President Trump’s Executive Order 13294 , requiring the Department of Labor (DOL) to give regulatory swiftness and help businesses struggling to recover from the COVID-19 impact. The Field Assistance Bulletin goes on to elaborate that the Department of Labor will not impose liquidated damages if:

1. there is not clear evidence of bad faith and willfulness
2. the employer's explanation for the violation(s) show that the violation(s) were the result of a bona fide dispute of unsettled law under the FLSA;
3. the employer has no previous history of violations;
4. the matter involves individual coverage only;
5. the matter involves complex section 13(a)(l) and 13(b)(l) exemptions; or
6. the matter involves State and local government agencies or other non-profits.

If any of the 6 conditions apply, the Department of Labor (DOL) will only pursue back pay. If not, requests for liquidated damages must seek approval from the Wage and Hour administrator and the Solicitor of Labor.

The new Regulatory Relief effective July 1, 2020 should give businesses a break as they struggle to survive during COVID-19 pandemic.

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