California Unions And Businesses Compromise On PAGA Reform

The Private Attorneys General Act (PAGA) has had a major impact on workers and employers in California. PAGA makes it easier for employees to file lawsuits against their bosses for Labor Code violations. Enacted in 2004, PAGA has helped workers get the money and working conditions they deserve, but employers have claimed that it has been a hardship. In fact, a group of companies worked together to get a measure on the November 2024 ballot to effectively repeal PAGA – this could have left workers vulnerable to wage theft and other violations.

Following tense negotiations, California unions and business leaders recently reached a compromise on PAGA.

Key Aspects Of PAGA Reform

Reforms Penalty Structure

• Caps penalties on employers who act quickly to fix faulty policies/procedures and to make workers whole after receiving a PAGA notice
• Caps on penalties for employers who are proactive in complying with PAGA, even before receiving a notice
• Creates new, higher penalties on companies that violate labor laws in malicious, fraudulent, or oppressive manner
• Increases the amount of penalty money that goes to the worker from 25% to 35%

Reduces And Streamlines Litigation

• Increases the number of Labor Code sections that can be corrected or changed to reduce the need for litigation 
• Protects small employers by strengthening their right to request corrections or removal of defects in the law
• Formalizes the rules by which a court may limit the scope of claims, which helps courts manage cases more effectively

Improves Measures For “Injunctive Relief And Standing”

The reforms allow courts to provide injunctive relief or a court order that compels businesses to make the necessary changes to address labor code violations.

The changes also address the part of PAGA that said someone could file a claim on behalf of another person. The reforms correct this and require that the person filing the complaint have “standing,” which means they have been personally harmed by a labor code violation, and submit the claim within a year of that violation.

Strengthens State Enforcement

To manage claims associated with PAGA effectively, the state needs many more workers. The PAGA reforms give the Department of Industrial Relations (DIR) the ability to accelerate hiring and fill vacancies in hopes of more timely and effective enforcement of employee labor claims.

Did Your Boss In California Potentially Commit Labor Code Violations? Contact Your Employment Attorneys At D.Law!

California labor law is a rapidly changing landscape in California, and it can be hard for everyday workers to know if their boss has violated California law, or what they can do about it. If you suspect that your employer has violated California labor codes, contact or call D.Law. Our employment attorney can help you exercise your rights as a worker in the Bay Area, San Diego, Fresno, Los Angeles, and other California cities.