What Is PAGA & Why Is It Important?

Pay and overtime issues March 5th, 2024
What is PAGA- woman at desk with looming dark figures over her What is PAGA- woman at desk with looming dark figures over her

The practice of some greedy employers taking an approach to taking money that isn’t theirs has been going on for decades, also known as corporate wage theft. Fighting corporate wage theft and protecting workers requires fast thinking, tenacity, and a strong grasp of the law. Fortunately, there is a group of dedicated professionals who are taking action to stop corporate wage theft in California. Read more about PAGA below. 

What Is Corporate Wage Theft?

Corporate wage theft happens when companies try to steal directly from their employees’ paychecks. 

Corporations do this by:

  • Not paying an employee for all the hours they worked
  • Refusing to pay overtime correctly
  • Paying less than minimum wage
  • Not providing legally compliant lunch breaks and rest breaks
  • Not reimbursing employees for expenses related to work activities they do

Existing California law considers the above actions to be wage theft, and therefore, illegal. In fact, California has one of the strongest wage and hour laws in place to protect workers’ wages. This law, known as the Labor Code Private Attorneys General Act (PAGA), allows workers to collectively enforce their rights to receive all the money they rightfully earn.

Workers should know, though, that billionaire corporations are also banding together to rewrite PAGA. Big companies, such as Walmart, Wells Fargo, Koch, GlaxoSmithKline, and other players in Big Tobacco, Wall Street Banks, and Big Pharma hire lobbyists who are working to change the law so that they can pocket their workers’ paychecks.

What Is PAGA?

PAGA creates a legal pathway that workers can take to get paid for the hard work that they do. 

Employees can file a claim on behalf of:

  • Themselves
  • Other workers
  • The State of California for violations of the labor code

PAGA went into effect in 2004. In the last 20 years, labor groups and other supporters maintain that the law has helped workers get the money they earned. Each year, about 30,000 wage claims are filed with the state labor commissioner. The $40 million recovered each year represents only about 2 percent of the estimated $2 billion California’s workers lose to wage theft.

What Are Most PAGA Claims For?

More than 90 percent of PAGA claims are for wage theft in the form of overtime violations and failure to pay for all of the hours worked. Others claim that the employer paid less than minimum wage, denied workers rest periods or meal breaks and required workers to complete tasks before or after paid work hours.

Many of the workers affected by wage theft are minimum-wage employees who are also people of color. These are the same workers that kept the nation running during the pandemic, often at a lower wage out and at a high risk of danger of a sense of duty.

PAGA May Be In Danger

While PAGA clearly helps employees get the compensation they deserve for their work, many employers are challenging the law. In November 2024, California voters will consider a ballot measure to repeal PAGA and replace it with the California Fair Pay and Employer Accountability Act (FPEAA). This act would make it much easier for corporations to keep workers’ rightful earnings.

UCLA Labor Center published a report to address the concerns being proposed by this problematic ballot measure, which found the following:

  • PAGA is crucial to enforce labor laws where workers have signed arbitration agreements. There is a crisis of compliance in low wage industries and asking state enforcement agencies to enforce these violations is an impossible task.
  • PAGA liability creates a market incentive to comply with labor laws. Corporations are incentivized to invest in compliance with labor and employment laws when noncompliance presents a significant threat to their profits.
  • PAGA penalties fund labor law outreach, public enforcement, and education. Last fiscal year, PAGA generated $209 million for the LWDA.
  • PAGA suits address wage theft and other serious violations. More than nine out of ten (91%) of PAGA claims allege wage theft, including overtime violations (79% of cases) and failure to pay for all hours worked (76% of cases).
  • PAGA suits, while critically important to labor standards enforcement, comprise less than 1% of state court cases.

Wondering About PAGA In California? Contact Your Employment Attorneys At D.Law

Employees work long, hard hours to put food on their families’ table – and big business is doing everything they can to take away their workers’ earnings. If you have been a victim of wage theft, consult with or call D.Law. Our employment lawyer helps people just like you get the money you worked for in the Bay Area, San Diego, Fresno, Los Angeles, and other California cities.

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