The U.S. Department of Labor announced June 24 that it will no longer automatically pursue double damages for overtime and minimum wage violations when it seeks to settle claims prior to filing suit. This new policy is effective July 1, 2020. This announcement follows an executive order by President Trump to eliminate regulations and enforcement policies that will impact the economic recovery in the wake of the COVID-19 pandemic shutdown.

The DOL clarified that it will still seek double damages (liquidated damages plus actual damages) where there is clear evidence of bad faith or a willful violation. Proof of a lack of bad faith could come in the form of the employer’s bona fide dispute of unsettled FLSA law and lack of past history of violations.

The DOL also noted that investigations and enforcement proceedings will move more quickly with the new policy.