The U.S. Department of Labor has rescinded a Trump administration policy and restored investigators’ ability to seek liquidated damages in pre-litigation settlements, or twice the amount of back pay that an employer owes, for alleged violations of the Fair Labor Standards Act.

A blog issued Friday by Jessica Looman, principal deputy administrator for the DOL’s wage and hour division, said under the FLSA, employers who violate minimum wage, overtime and protections for employees who receive tips are liable for the unpaid wages or unlawfully kept tips and for an additional equal amount in liquidated damages.

The blog said, “The department’s use of this enforcement tool will provide an incentive for employers to comply with the law, to level the playing field for those that play by the rules, and to help alleviate the inequities exacerbated when low-wage, essential workers face the additional and too common burden of wage theft. “

The department stopped using this enforcement tool in June 2020. The wage and hour division’s field assistance bulletin issued then cited President Trump’s May 2020 Executive Order 13924, Regulatory Relief to Support Economic Recovery, which required the department to “continue removing certain regulatory and enforcement barriers to economic prosperity as America strikes to defeat the economic effects of COVID-19.”

The bulletin said effective July 1, 2020, the department would not assess pre-litigation liquidated damages if there was no clear evidence of bad faith and willfulness; the employer’s explanation for the violations showed they were the result of a bona fide dispute of unsettled law under the FLSA; the employer had no previous history of violations; and the matter involved individual coverage only, among other provisions.

According to Ms. Looman’s blog, from fiscal 2016 through fiscal year 2010, the division had assessed more than $200 million in liquidated damages for about 250,000 affected workers before the enforcement tool was rescinded.