Midyear review of WHD’s regulatory changes reveals transformed landscape

The first half of 2025 has ushered in a transformative period for the U.S. Department of Labor (DOL), marked by sweeping deregulatory initiatives, judicial reversals, and structural realignments. Under the Trump administration’s renewed focus on reducing regulatory burdens, the Wage and Hour Division (WHD) has recalibrated its enforcement posture, while broader agency actions signal a proclivity toward redefining federal labor policy. This article outlines the most significant wage and hour regulatory developments.

Independent contractor rule abandoned

On May 1, 2025, the DOL issued a field assistance bulletin (FAB) directing WHD investigators to disregard the 2024 final rule on independent contractor classification when conducting Fair Labor Standards Act (FLSA) investigations. Instead, investigators are instructed to apply the prior guidance outlined in Fact Sheet 13 (July 2008) and Opinion Letter FLSA 2019-6.

While the 2024 rule—“Employee or Independent Contractor Classification Under the FLSA”—remains in effect for private litigation, the FAB clarifies that it will not guide WHD enforcement actions. The reinstated 2019 opinion letter applies to cases where no back wage payments or civil penalties have been made as of May 1, 2025.

This change signals a return to a more employer-friendly “economic reality” test for enforcement purposes. Employers should closely review the FAB and accompanying materials to understand how misclassification will be assessed in current investigations.

WHD opinion letter program relaunched

In a significant move to enhance regulatory clarity, the DOL launched a new opinion letter program in June, offering tailored compliance guidance from five key enforcement agencies. This initiative will enable employers, workers, and stakeholders to obtain official interpretations of federal labor laws as applied to specific workplace scenarios.

Participating agencies include:

• The WHD, offering wage, hour, and employment law guidance;
• The Occupational Safety and Health Administration (OSHA), providing safety regulation interpretations;
• The Employee Benefits Security Administration (EBSA), giving advisory opinions on benefits compliance;
• The Veterans’ Employment and Training Service (VETS), offering guidance on veteran employment laws; and
• The Mine Safety and Health Administration (MSHA), providing compliance resources via the MSHA Information Hub.

Opinion letters serve as authoritative tools to reduce legal uncertainty, promote consistent enforcement, and mitigate litigation risk. Employers can rely on the opinion letters to guide internal policies and ensure alignment with federal requirements.

DOL ends liquidated damages in administrative settlements under FLSA

On June 27, 2025, the DOL issued FAB 2025-3, formally rescinding FAB 2021-2 and clarifying that the WHD may no longer supervise the payment of liquidated damages in administrative matters under the FLSA.

Under Section 216(c) of the FLSA, the WHD is authorized to supervise the payment of unpaid minimum wages and overtime compensation. However, the statute does not permit the DOL to recover liquidated damages outside of litigation. As a result, WHD investigators and the Solicitor’s Office are now prohibited from requesting liquidated damages in any pre-litigation investigation or resolution.

The policy shift marks a return to pre-2010 enforcement practices and is expected to streamline administrative settlements by limiting recovery by the DOL to back wages only in administrative settlements. Employers under investigation should note that liquidated damages will be pursued only if the department initiates formal litigation.

WHD enforcement actions continue

Despite the deregulatory momentum, the WHD has maintained robust enforcement activity. Notable recoveries include:

• $824,276 from a Las Vegas drywall contractor for overtime violations;
• $594,313 from a Florida construction firm for unpaid wages;
• $446,334 from Louisiana home care providers for misclassification; and
• $1 million from two California ice manufacturers for deliberate overtime withholding.

The actions underscore the WHD’s continued focus on misclassification, piece-rate compensation, and child labor violations.

Conclusion

The first half of 2025 has marked a decisive shift in the DOL’s regulatory philosophy. While enforcement remains active, the rollback of liquidated damages, suspension of overtime rulemaking, and deregulatory proposals signal a recalibration toward employer flexibility. Legal practitioners and compliance professionals should monitor developments closely, reassess classification strategies, and prepare for further rulemaking in the months ahead.

The Federal Employment Law Insider (FELI) is written by David S. Fortney, H. Juanita Beecher, and Burton J. Fishman of Fortney & Scott, LLC.