The USDOL announced a new policy change banning the pursuit of liquidated damages during pre-litigation investigations and settlements, which will primarily benefit California employers facing wage and hour investigations. Previously, liquidated damages could be sought in these proceedings, impacting employers significantly. The shift reflects a changing approach towards enforcement that began under Obama, was reversed during Trump's administration, and has now been reinstated under Biden. While federal inquiries remain rare in California due to stringent state laws, this change allows for a more favorable environment for employers under investigation.
Most California employers do not get investigated by the United States Department of Labor because wage and hour enforcement is generally covered by state law, making federal scrutiny rare.
USDOL's new guidance prohibits it from seeking liquidated damages during pre-litigation investigations and settlements, a significant shift benefiting employers facing wage and hour inquiries.
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