California has enacted a number of powerful laws that allows for the enforcement of the state's wage and hour laws. Unfortunately, in this state, there are a number of workers whose hands are tied when it comes to filing class-action lawsuits against their employers because the company they work for forces them to sign mandatory arbitration agreements.
For these employees, the Private Attorneys General Act, commonly known as PAGA, is the only way to obtain justice when employers shortchange the wages to which they are entitled. But for this very important law, there would be little that prevents employers from ignoring the state's wage laws. For employees, PAGA might be the single most important law when it comes to protecting their right to fair wages in California.
The Private Attorneys General Act or PAGA essentially authorizes employees who are subject to illegal labor code violations to act as private attorneys general with the goal of recovering civil penalties from their employers who have violated the state's labor code. You as the worker have the power to bring a case against your employer, just as the state's Attorney General might, when your employer acts in violation of California wage and hour laws.
PAGA was passed in 2004, at a time when the state of California lacked the resources to go after companies that violated the state's labor laws. The state's legislature passed PAGA as a response to more and more employers brazenly shortchanging their employees and not paying them fair wages.
In order to file a PAGA lawsuit, an employee who is wronged must file a claim with the state of California. This claim must provide details of all the facts that support the California Labor Code and/or California Wage Order violations made by the company. The state of California has 65 days in order to provide notice to the employee regarding the state's intention to launch an investigation. If the 65 days have passed and the state does not provide notice, then the employee can go ahead and file a PAGA lawsuit, which is a representative action on his or her behalf or on behalf of other aggrieved employees.
Under PAGA, an "aggrieved employee" is the employee of a company that has violated California's wage and hour laws or the laws set forth by the state's Occupational Safety and Health Administration (OSHA). Typically, an employee who has been wronged files a PAGA lawsuit on behalf of himself or herself and other aggrieved employees of that company.
However, it is important to understand that PAGA actions are different from class actions, primarily because the statutory suits are essentially law enforcement actions. In addition, class actions must satisfy other legal requirements that PAGA cases don't. Therefore, it is simpler to bring a PAGA case than it is to bring a class-action lawsuit.
What Are the Benefits of PAGA?
First and foremost, PAGA protects employees' rights. In addition to allowing workers to seek compensation for their losses brought about by labor violations, PAGA also affords them the ability to seek justice that could very well result in positive change in California's workplaces. Almost all companies and corporations who face PAGA lawsuits change their unethical and illegal practices because they don't want to face these penalties again. These are positive changes that benefit all employees – not just those who work there at the time, but also future employees.
PAGA provides an efficient method of enforcement. Therefore, California businesses are far less likely to cut corners in order to compete, and this levels the playing field for all companies. PAGA essentially motivates companies to proceed with caution. So, employers who are committed to following the letter of the law and doing the right thing by their workers are not left behind.
PAGA also means increased revenue for the state. It is a fact that PAGA generates millions of dollars in revenue for the state of California without the state having to deploy its resources. Private attorneys are doing the work, in these cases. It is also important to remember that the problem we have in California is not the absence of good laws. We have good laws, but there is no proper mechanism to enforce those laws. Without PAGA employment law violations in California would be sky-high.
There are a number of businesses that are pushing to get rid of PAGA or at the very least weaken it. But, that would be a grave mistake because if PAGA goes away, California's workers will lose their vital protections against labor law violations. PAGA is also fair to employers in the sense that it gives companies the opportunities to fix their violations with no penalties incurred.
PAGA addresses a number of common employment law violations including minimum wage violations, unpaid overtime, missed meal breaks and rest breaks, worker misclassification, unreimbursed business expenses and miscalculated pay rates. While opponents of PAGA claim it's just a way for attorneys to make money, they leave out the fact that it generates revenue for the state and most importantly for aggrieved workers who have been denied fair wages. PAGA helps everybody and offers protections for vulnerable workers. PAGA is also one of the reasons California's economy has grown and thrived over the year as well.
How Does the Process Work?
The purpose of PAGA is not to recover damages for the worker, but to create a means of assigning citizens as private attorneys general to enforce the state's labor laws. It is important to remember that the relief provided under this law is meant to benefit the general public and not the specific individual or group of individuals bringing the action.
That said, you could still receive monetary damages under a PAGA lawsuit. This is because employers can be made to pay penalties for wage and hour violations or other types of labor code violations. However, while 25% of the penalties recovered go to the employees, 75% of the penalties recovered through PAGA go to the state of California. Depending on the nature and extent of the violations, PAGA penalties could add up to a significant amount of money.
However, there is no way to guarantee how much the penalties will be or how much employees will receive through a PAGA action. If you are the employee who is bringing the claim, most courts will likely give you additional compensation because you will be signing a release against the company that is paying the penalties.
It is also important to understand that you can't recover back wages or wages your employer did not pay you as part of PAGA. You can only recover penalties under PAGA. So, you cannot recover wages as part of your PAGA lawsuit. A PAGA action is essentially for the purpose of enforcing labor codes meant to protect Californians and penalize companies for illegal conduct or violations of the law.
Before bringing a PAGA claim, the employee bringing the action must provide written notice to not just the employer but also the Labor and Workforce Development Agency (LWDA). A PAGA written notice must be filed online. California Labor Code states that the written notice to the employer must be sent via certified mail. Once this filing procedure is completed, a PAGA lawsuit can be filed in court. There is a $75 filing fee for a new PAGA claim.
A PAGA written notice should specifically state which provisions of the California Labor Code have been violated and should include facts and evidence to substantiate the alleged violations. In fact, the PAGA notice should contain details, facts and theories to substantiate the allegations made against the employer. The more details and facts you can provide, the stronger your case will be. PAGA claims must be filed within one year of the violations occurring. In other words, there is a one-year statute of limitations when it comes to PAGA lawsuits.
The penalties under PAGA can add up very quickly. Under PAGA, the civil penalty against the company for an individual violation is $100 per worker for each pay period. The penalty for each subsequent violation is $200 per employee for each pay period. Therefore, for each initial violation, the worker may be able to receive $25 (which is 25%) for each violation per pay period and $50 for every subsequent violation per pay period. So the penalties under PAGA can add up soon. If you do prevail in a PAGA action, in addition to receiving a portion of the penalties you may also be able to receive attorney fees and court costs.
Also, PAGA awards are discretionary. Under the PAGA, the penalties that a court orders companies to pay for the violations can be left to the judge's discretion. However, eventually, the court must award PAGA penalties if it is determined that the employer violated the state's Labor Code. PAGA allows an aggrieved employee, or a person affected adversely by at least one Labor Code violation committed by his or her employer, to pursue penalties for all such violations committed by the employer. Also, an employee who is seeking to recover PAGA penalties cannot do so as an individual. He or she must bring the action on behalf of himself or herself and other employees.
PAGA and Qui Tam Lawsuits
A qui tam lawsuit is a type of legal action brought by a whistleblower who exposes fraud by one's employer on behalf of the government. The person who brings such an action will potentially receive a share of the amount recovered (penalties) as a reward for exposing his or her employer. The California Supreme Court has said that PAGA is a type of qui tam law that allows an aggrieved employee to recover civil penalties on behalf of the state.
Under the False Claims Act, any private citizen has the authority to sue a business or an individual that is committing fraud against the government, and recover funds on behalf of the government. The qui tam lawsuit is filed under seal, which means it is not available for the media or public to view, while the government is investigating the allegations. The company or person who is being investigated is also not told about the qui tam case. A qui tam lawsuit and documents supporting it should give the government details and specific information about the alleged fraud.
The government then investigates the allegations with the assistance of the whistleblower's attorney and makes a determination as to whether it will join the case. Whistleblowers may file a PAGA action and pursue such cases on their own even if the government decides that it will not intervene. Defendants who are found liable under the False Claims Act may have to pay as much as three times the government's losses as well as penalties for each false claim. Most successful qui tam cases are resolved through settlement negotiations rather than a trial. In some cases, the case may go to a trial.
It is also important for employees to remember that the employer does not have the right to retaliate against them for blowing the whistle, assisting the government to investigate fraud or wrongdoing, or for bringing a PAGA action. Workers are well within the rights afforded to them under California laws to bring these actions against their employers. If an employer fires an employee in retaliation for filing a qui tam lawsuit or PAGA lawsuit, employees may have a basis to bring a wrongful termination lawsuit seeking compensation for damages and losses.
Contacting an Employment Lawyer
The experienced Los Angeles employment law attorneys at Kingsley & Kingsley have a long and successful track record of representing aggrieved workers and helping them hold employers accountable. Whether it's a PAGA action, qui tam lawsuit or a class action lawsuit, our employment lawyers have the knowledge and resources to fight for your rights and help you seek maximum compensation for your losses. We offer a no-win-no-fee guarantee, which means we don't charge you any fees unless we recover compensation for you. Call us at 888-500-8469 for a free consultation and comprehensive case evaluation.