PAGA Reforms Provide Relief for Employers

The Private Attorneys General Act (PAGA) authorizes aggrieved employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for Labor Code violations.  On July 1, 2024, California Governor Gavin Newsom signed SB 92 and AB 2288 into law, significantly reforming PAGA.  Some of the key points are outlined below:

• Stricter standing requirements in that a plaintiff must now have “personally suffered” each of the alleged Labor Code violations; 
• A plaintiff can only seek penalties on behalf of other employees within a one-year period;
• A potential $25.00 wage statement penalty will instead apply when the employee could “easily determine from the wage statement alone” the required information (hourly rate of pay, hours worked, etc.) and where a claim is based on inaccuracies in the employer’s listed name and address when the employee would not otherwise be confused or misled about the employer’s identity;
• A $50.00 wage statement penalty will instead apply when the violation is an isolated, non-recurring event that does not extend beyond 30 consecutive days or four consecutive pay periods;
• The pre-existing heavy $200.00 “subsequent violation” wage statement penalty would only be available if, within five years, an agency or court determined that a policy or practice giving rise to a violation was unlawful, or if a court determines the employer’s conduct giving rise to the violation was malicious, fraudulent, or oppressive; and
• Cure provisions and caps on penalties have been expanded where reasonable steps were taken to comply with the law

These reforms apply to civil actions filed on or after June 19, 2024.  Employers are encouraged to read the PAGA in its entirety for specifics and to work with their labor counsel to ensure compliance.