On June 18, 2024, California’s Governor Newsom announced that an agreement has been reached with business groups to reform the current Private Attorneys’ General Act (“PAGA”).
This agreement follows a proposed November 2024 ballot measure that would significantly limit PAGA cases and liability. If the agreement is finalized by June 27, 2024, the PAGA ballot measure will be taken off the November ballot.
Governor Newson’s proposed agreement would provide the following changes to PAGA:
New penalty structure
- Caps penalties on employers acting in good faith who quickly address potential violations brought to their attention.
- Increases penalties on employers who act maliciously, fraudulently, or oppressively in violating labor laws.
- Increasing amount payable to employees from 25% to 35%.
Reduced and streamlined litigation
- Increases opportunities for employers to cure violations therefore reducing litigation.
- 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 the scope of claims presented at trial to ensure cases can be managed effectively.
Improved 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.
Strengthened 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.
Stokes Wagner will be monitoring all developments of upcoming legislation and will provide updates as they arise.
