California’s Private Attorney General Act (PAGA) of 2004 underwent significant reforms on July 1, 2024. These changes were introduced through Assembly Bill (AB) 2288 and Senate Bill (SB) 92, signed into law by Governor Newsom. These amendments aim to encourage employer compliance, reduce frivolous lawsuits, and make PAGA claims more manageable.
Here’s a summary of the key amendments:
- Stricter Standing Requirements: Employees now need to prove personal harm from Labor Code violations, making it harder to bring broad PAGA claims. However, employers still need to be vigilant about compliance.
- Reduced Penalties: A cap of 15% of the original penalties applies if employers can show “all reasonable steps” were taken to comply before receiving a PAGA notice.
- Cure Procedures: Employers have opportunities to cure certain violations before lawsuits are filed, and small businesses have additional cure procedures.
- Early Resolution: Larger employers (100+ employees) can request early evaluation conferences to expedite resolution.
Most amendment provisions took effect immediately and apply to PAGA actions filed on or after June 19, 2024, unless the employee’s underlying PAGA notice was submitted to the Labor Workforce Development Agency (LWDA) and the employer before June 19, 2024. Some provisions, such as cure procedures for small employers and measures to cure pay statement violations, take effect on October 1, 2024.
Next Steps
The PAGA reforms aim to create a more balanced system. While employers might face challenges with stricter standing requirements, the opportunities for reducing penalties and resolving issues early offer significant cost savings and improved compliance. However, the specific details of the amendments are complex, so consulting with an employment law attorney is recommended for navigating the new PAGA landscape.
Employers should review their current practices and implement measures to ensure compliance with Labor Code regulations.
Proactive communication with employees about wages and working conditions can help prevent misunderstandings and potential PAGA claims.
