With the introduction of AB 588 and its intent to close so-called “loopholes”, it is important for employees and employers to realize the benefits of PAGA and how it prevents employers from committing labor code violations related to wages, rest periods, health and safety, and retaliation.

What Is PAGA?

California rolled out a unique approach to enforcing the State's Labor Code when it enacted the Private Attorney General Act of 2004 (PAGA) codified in Cal. Lab. Code § 2698, et seq.  PAGA allows a private citizen to pursue civil penalties on behalf of the State of California Labor and Workforce Development Agency (LWDA) provided the formal notice and waiting procedures of the law are followed.

More specifically, PAGA allows current and former employees to file lawsuits to recover civil penalties that would otherwise only be recoverable by the government.  It is used for wage-and-hour and safety violations, and the lawsuits are filed on behalf of the named employee and other “aggrieved” current and former employees.

While similar to a “class-action lawsuit”, a PAGA claim is considered a “representative lawsuit,” and it can be pursued without meeting all the requirements of class certification.  That means it is easier for the employee's attorney to pursue, but still has the consequences of aggregating multiple employees.

The concept behind the law is that the state's labor agency does not have the resources to handle the penalty claims.  The statute authorizes private attorneys to step into the state's shoes to pursue those cases and entitles them to recover reasonable attorney's fees if the employee prevails.

A PAGA claim requires the exhaustion of administrative remedies with the labor agency before the employee may file a civil lawsuit.  The aggrieved employees must notify the agency and the employer in writing. That notice must include the specific labor code provisions that allegedly were violated and the facts and theories to support the accusation.  This notice should be recognized as the employee's first step before filing a lawsuit seeking civil penalties.

It is routine for the labor agency to issue a notice that it will not investigate the allegations. Once that happens, the employee is then free to sue under the private-attorneys law.

PAGA's Benefits

1. Correcting policies and procedures – When a claim of labor code violations arises, the employer is given the opportunity to “cure” any alleged violations. An employer may take this time to assess its wage-and-hour and safety policies, audit them to see if they are being followed, assess the potential for violations, and prepare a strategy for compliance.
2. Making the employee “whole” – The “cure” process requires making the aggrieved employees “whole” and correcting any violations. While these steps could could impact the employer financially, the ability for employers to take these steps benefits existing and future employees of the organization.
3. Timely response – An employer only has 33 days from the date of the notice to the labor agency to identify and cure the violations, so employers usually take quick action to seek legal advice or analyze potential issues swiftly and decisively.
4. Changes in employer practices – Audits related to allegations of labor code violations, or subsequent PAGA claims, usually result in policy and procedural changes. Employer audits may reveal not only issues in the company's policies but also the company's actual practices related to compensation, rest periods, sick leave, and more.
5. Variety of claims – The types of claims that can be filed under PAGA are extensive. The more notable labor code violations include, but are not limited to the following:

• 98.6 Retaliation for filing a labor complaint.
• 204, 204a, 204b Payment of wages on regularly scheduled pay days.
• 204.2 Salary's for executive, admin, and professionsal employees.
• 223 Prevailing wage and other wages scales must be paid, if applicable.
• 226.7 Proper meal breaks must be provided.
• 233, 234 Certain parts of sick leave can be used to care for a child, parent, spouse, or domestic partner.
• 351, 353 Tips and gratuities left for workers must be paid to the workers.
• 512 California meal break provisions.
• 1194, 1197, 1197.1 Minimum wage must be paid
• 6310, 6311 No retaliation for making a health or safety complaint or refusing to perform work under a “real and apparent hazard.”

While the PAGA law is still quite unsettled, as seen by the introduction of AB 588, there remains numerous benefits as a result of its passing and our firm continues to prosecute these claims as the best way to create change in corporate America. To further discuss PAGA, or a potential claim on your behalf, feel free to contact leading California employment lawyers at Kingsley & Kingsley. Call us at (818) 990-8300 or click here to contact us via email.