California PAGA Reform

In 2024, California Governor Newsom signed legislation to reform the Private Attorney General Act (PAGA), after achieving agreement between labor and business. The act provides needed relief for businesses who are working hard to follow the labor laws, but sometimes fall short. It also increases penalties for businesses who are intentionally violating laws meant to protect workers.

Reform penalty structure

• Encourages compliance with labor laws by capping penalties on employers who quickly take steps to fix policies and practices, and make workers whole, after receiving a PAGA notice, as well as on employers that act responsibly to take steps proactively to comply with the Labor Code before even receiving a PAGA notice.

• Creates new, higher penalties on employers who act maliciously, fraudulently or oppressively in violating labor laws.

• Ensures that more of the penalty money goes to employees by increasing the amount allocated to employees from 25% to 35%.

Reducing and streamlining litigation

• Expands which Labor Code sections can be cured to reduce the need for litigation and make employees whole quickly.

• Protects small employers by providing a more robust right to cure process through the Labor and Workforce Development Agency (LWDA) to reduce litigation and costs.

• Codifies that a court may limit both the scope of claims presented at trial to ensure cases can be managed effectively.

Improving measures for injunctive relief and standing

• Allows courts to provide injunctive relief to compel businesses to implement changes in the workplace to remedy labor law violations.

• Requires the employee to personally experience the alleged violations brought in a claim.

Strengthening state enforcement

• Gives the Department of Industrial Relations (DIR) the ability to expedite hiring and fill vacancies to ensure effective and timely enforcement of employee labor claims.