Wage-Hour Penalties Surge by Millions as DOL Closes Fewer Cases

The Labor Department assessed nearly $318 million in back pay and penalties from employers accused of minimum wage, overtime, and child labor violations in fiscal year 2025, a 33% increase from the year before, according to agency data.

The monetary penalties are the highest recorded by the DOL’s Wage and Hour Division in the last decade, and the most back wages since 2019.

The jump comes despite the agency concluding fewer compliance actions than it did in fiscal year 2024, according to WHD data analyzed by Bloomberg Law.

Labor and employment attorneys say the Trump administration’s deregulatory policy agenda and cuts to the federal workforce likely contributed to a dropoff in enforcement action last year, noting many of the highest penalties were levied by the Biden administration.

“The Trump administration told us in January what they were going to do and so in some regard they can pat themselves on the back for slowing down enforcement actions,” said Ogletree Deakins Shareholder Paul Lancaster Adams. He added that he’s seen a reduction in investigative activity by the DOL.

Workers received $259 million in back wage awards in the 2025 fiscal year, up from the $202 million awarded in the prior year. The WHD assessed $58.7 million in penalties during that time, compared to $35.9 million the year before, according to the DOL data.

The boosted figures come alongside efforts by President Donald Trump to ease compliance burdens for companies.

“Under the leadership of President Trump and Labor Secretary Chavez-DeRemer, the Department is enforcing the laws fully and fairly to promote equal competition for all job creators while protecting the rights and earnings of American workers,” WHD Administrator Andrew Rogers said in a statement.

Delayed Data

Wage and hour investigations can take years to resolve, depending on the complexity of the case.

Mark Wallin, a management-side attorney with Barnes & Thornburg LLP, said cases typically last between six and 14 months but noted the DOL didn’t open any new investigations against his clients in 2025.

The statute of limitations for the Fair Labor Standards Act is three years for willful violations, meaning that WHD can go back several years when opening inquiries.

According to a Bloomberg Law analysis of the agency’s case database, which shows details of individual cases, a large portion of the cases dated in 2025 stem from findings in previous years. Only 18% of the back wages and penalties originate from violations found in fiscal 2025 and the oldest cases date back to 2008.

“This to me indicates that the Biden administration was probably very active before the change in administration and maybe we’re seeing the results of work done in 2024 carry over,” Wallin said. “If you look at this next year, the story could be very different.”

Included in the 2025 data is $1.9 million in penalties levied against Paragon Contractors Corp. during the Biden administration, after the WHD found it had unlawfully employed around 200 children between 2008 and 2013.

Other cases that drove the overall penalty figures higher for 2025 involved companies such as Chick-Fil-A, Mar-Jac Poultry, and McDonald’s with child labor violations between 2016 and 2024.

Assistance, Not Enforcement

The higher penalties and back pay could’ve stemmed from a Trump administration program that allows employers to voluntarily declare labor violations, attorneys said.

The Payroll Audit Independent Determination program, which initially launched under the first Trump administration but ended when President Joe Biden took office, encourages companies to report violations to avoid penalties and obtain guarantees from workers that they won’t bring wage and hour claims to court.

According to the case dataset, all of the top 10 actions with the highest back wage figures had no civil monetary penalties attached to them, which was a departure from 2024.

“Wage and hour violations can be very technical and are often a result of just a very minor oversight and if there’s an incentive through this program to avoid litigation and liquidated damages in exchange for letting the department know where you went wrong and getting a clean bill of health on the other side, that’s extremely attractive,” Wallin said.

All of the department’s other actions would signal decreased enforcement, he added.

The DOL stopped policing compliance with Biden-era versions of rules around worker misclassification and ceased seeking liquidated damages, which are remedies for workers that go beyond back pay.

This year the DOL plans to finalize its rollback of worker-friendly policies around child labor and tip-credits, along with protections for certain health aides.

The confirmation of Trump’s WHD administrator Rogers is expected to accelerate the shift away from traditional prosecution of wage and hour violations, Adams said.

“If he toes the lines in terms of what the president would like to see happen, then we’ll see an emphasis on promoting opinion letters and employer assistance rather than enforcement,” he said.

Staffing Decline

A lower number of investigators under Trump could have jeopardized WHD’s ability to police employment laws, according to former officials and worker advocates.

According to a May report from Rutgers University, the WHD employed 611 investigators nationwide, the lowest on record.

Those numbers may be lower now after the administration initiated widespread layoffs and coaxed staffers into leaving through buyouts and early retirement incentives.

The DOL lost roughly 20% of its employees from the deferred resignation program although some were offered reinstatement.

Worker advocates warned that any cuts to staff could harm the agency’s ability to enforce child labor, minimum wage, or other worker protections.

“There’s not a commitment to investing in staff to enforce wage and hour laws,” said Jessica Looman, former WHD administrator under Biden. “There’s just a lack of wage and hour investigators, which means that there’s going to be a lack of recovery on behalf of working people who are victims of wage theft.”