Millions of American workers face a harsh reality: being systematically cheated out of overtime pay or paid below minimum wage. This costs workers billions of dollars in unpaid wages every year. While many workers have historically relied on the U.S. Department of Labor for help, a significant policy change announced on June 27, 2025, has fundamentally altered the landscape for wage recovery.

This change creates a compelling new reason why workers who have been cheated out of their rightful pay should seriously consider pursuing private litigation instead of relying solely on government enforcement.

Understanding the Department of Labor’s Policy Shift

Under the Fair Labor Standards Act (FLSA), workers denied proper wages or overtime are entitled to recover not just the unpaid wages they’re owed, but also “liquidated damages” – an additional amount equal to their unpaid wages. This “double damages” provision means if your employer owes you $5,000 in unpaid overtime, you could potentially recover $10,000 total.

For over a decade (2010-2025), the U.S. Department of Labor actively pursued these liquidated damages during administrative investigations, allowing workers to potentially recover their full legal entitlement without filing a lawsuit.

However, on June 27, 2025, the US DOL announced a dramatic reversal through Field Assistance Bulletin No. 2025-3. The new policy prohibits US DOL investigators from seeking liquidated damages during administrative investigations. Going forward, the DOL will only pursue basic unpaid wages or overtime compensation.

The Impact: Workers Now Get Only Half Through US DOL Investigations

This policy change means workers filing US DOL complaints will now recover only the basic unpaid wages—not the liquidated damages federal law entitles them to. To recover those additional damages, workers must file their own federal lawsuit.

This represents a 50% reduction in compensation through DOL enforcement – a devastating loss for workers already struggling financially due to wage theft.

Why Private Litigation Is Now More Critical Than Ever

Private lawsuits filed in federal court can still recover the full range of FLSA damages, including liquidated damages. This means workers pursuing private litigation can potentially recover twice as much as those relying solely on DOL enforcement.

Private litigation offers several key advantages:

  • Complete Recovery: Unlike DOL investigations, private lawsuits can recover liquidated damages, ensuring workers receive the full remedy Congress intended.
  • Attorney’s Fees: The FLSA requires employers to pay successful plaintiffs’ attorney’s fees, making experienced legal representation accessible through contingency arrangements.
  • Faster Resolution: Private litigation can often be resolved more quickly than lengthy DOL investigations.
  • Greater Control: Workers and their attorneys can make strategic decisions based solely on what’s best for the individual case.

Pelton Graham attorneys offer a no-fee contingency, which means you only pay them if you collect.  

Collective Actions: Amplifying Worker Power

Collective actions under the FLSA allow similarly situated workers to join together, sharing litigation costs while amplifying their collective bargaining power. This is particularly valuable in industries where wage violations are systematic rather than isolated issues.

When multiple workers band together, they can challenge employer-wide practices and recover damages for all affected employees. The availability of liquidated damages in collective actions creates powerful incentives for fair settlements, as employers face potentially substantial financial exposure.

Strong Legal Protections Against Retaliation

Federal law provides robust protections against employer retaliation for workers who assert their wage and hour rights. Section 215(a)(3) of the FLSA specifically prohibits employers from discharging or discriminating against employees who file complaints, participate in investigations, or testify in proceedings.

Workers who experience retaliation can file separate lawsuits seeking reinstatement, back pay, and other damages. These protections cover not only formal lawsuits but also DOL complaints, internal complaints, and even discussions with co-workers about wage issues.

The Role of Experienced Employment Counsel

The DOL’s policy change makes experienced employment counsel more critical than ever. Experienced employment attorneys bring crucial advantages: identifying all potential claims, gathering necessary evidence, understanding strategic considerations, and leveraging professional relationships with experts and investigators.

The contingency fee structure common in wage and hour cases, combined with the FLSA’s fee-shifting provision, ensures workers can obtain high-quality legal representation without bearing financial risk.

Taking Action: What Workers Should Do Now

Workers who suspect wage and hour violations should take immediate action:

  • Document Everything: Gather comprehensive records of hours worked, wages paid, and job duties performed, including personal records and electronic communications.
  • Consult Experienced Counsel: Many employment attorneys offer free consultations for wage and hour cases. Get professional advice about claim strength and strategy.
  • Act Quickly: The FLSA’s statute of limitations can significantly limit recoverable damages since the statute of limitations is only 2 years (or 3 years for willful violations). Workers who wait too long may lose substantial recovery.
  • Consider Collective Action: Evaluate whether claims might be appropriate for a collective action involving other similarly situated employees.
  • Don’t Fear Retaliation: Federal law provides strong protections, and experienced employment counsel can help navigate the legal process.

The Bottom Line

The US DOL’s policy change represents a significant shift in wage and hour enforcement, but it doesn’t diminish workers’ rights under federal law. Workers remain entitled to full recovery, including liquidated damages, under the FLSA – they must now pursue private litigation to obtain it.

Don’t let your employer get away with paying only half of what you’re legally owed. The Department of Labor’s policy change makes private litigation more important than ever, but it also makes the potential rewards of taking action even greater. If you believe you have been cheated out of wages or overtime compensation, consult with experienced employment counsel Pelton Graham for a free consultation to learn about your rights and options under federal law.

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