Part of Budget Bill Expands Labor Officials' Involvement in PAGA Claims
PAGA Claims – Senate Bill 836 was approved by the California Legislature on June 15, 2016 and Governor Jerry Brown on June 27, 2016. This “trailer budget bill” included a number of amendments to the Labor Code Private Attorneys General Act, commonly referred to as PAGA.
PAGA and PAGA Claims
Existing law, the Labor Code Private Attorneys General Act of 2004, authorizes an aggrieved employee to bring a civil action to recover specified civil penalties, that would otherwise be assessed and collected by the Labor and Workforce Development Agency (agency), on behalf of the employee and other current or former employees for the violation of certain provisions affecting employees. Existing law requires notice of the claim from the aggrieved employee to the agency and to the employer by certified mail. Existing law provides that an employee who prevails in an action under these provisions is entitled to recover his or her reasonable attorney's fees and costs.
The amendments to PAGA per SB 836 contain the following changes:
- Includes a $75 filing fee for new case notices and any employer response to such notice;
- Requires online filing and transmission of all items submitted to the Labor Workforce Development Agency (LWDA);
- Requires a copy of proposed settlement to be submitted to LWDA at same that it is submitted to court;
- Requires parties to provide the LWDA with a copy of the court's judgement;
- Extends various time lines, including the time LWDA reviews new cases from 30 to 60 days;
- Extends the time for LWDA to notify parties of intent to investigate violation from 33 to 65 days;
- Provides LWDA with option to send notice to extend the 120 day time limit for investigating and citing the employer by an additional 60 days; and
- Sunsets the 60 day extension provision in July 1, 2021.
The amendments became effective immediately for PAGA cases filed on or after July 1, 2016.
These PAGA amendments were added to address the issue of preventing “unnecessary litigation”. The final bill was watered down from Governor Brown's original proposal. In his initial proposal the governor stated: “The administration is committed to reducing unnecessary litigation and lowering the costs of doing business in California to support a thriving economic environment,” and that “[g]iven the scope and frequency of PAGA filings, there is a great opportunity to increase the rate of administrative handling of cases versus the courts.”
Ultimately, these changes give the LWDA more time to investigate and issue citations for Labor Code violations and more oversight over PAGA actions. SB8386 also provides the LWDA an opportunity to object to proposed PAGA settlements as insufficient and gives the LWDA more funds to investigate and issue citations for Labor Code violations.
The Impact of PAGA Amendments
It is uncertain how the amendments to SB 836 will impact the number of PAGA claims that will be accepted for administrative enforcement actions by California's labor law enforcement agencies. Detractors of SB 836 feel that the final amendments will result in the LWDA becoming more active in 1) reviewing initial notices of claims filed by private parties for possible direct action and 2) exercising its newly defined statutory right to intervene in PAGA civil penalty settlement proposals by private parties that must be approved by the courts in such actions.
Only time will tell if these amendments result in the governor's stated objective of “reducing unnecessary litigation and lowering the costs of doing business in California to support a thriving economic environment”. We will continue to monitor this issue, among others dealing with California employment law. Should you have any questions about employment law or class actions in California, don't hesitate to contact leading California employment lawyers at Kingsley & Kingsley. Call and speak to an experienced California lawyer toll-free at (888) 500-8469 or click here to contact us via email.