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PAGA

PAGA

Overview

California’s Private Attorney General Act (“PAGA”) (Labor Code Sections 2698-2699.5) is often referred to by employers as the “sue your boss law.” PAGA allows aggrieved employees to seek civil penalties on behalf of the State of California and other aggrieved employees for violations of the California Labor Code. PAGA was intended to improve workplace protections for employees’ rights and safety.

While PAGA has increased enforcement activity around labor code violations, it has also created a bonanza for trial attorneys and has served to punish even good California employers with penalties that can reach seven figures for retroactive violations that did not meaningfully affect an individual’s employment.

Moreover, PAGA forces employers to cover the attorney fees for the employees who sue them, greatly expanding the cost for even the smallest of mistakes. This only serves to fuel the ever-increasing number of PAGA claims and trial attorney firms specializing in the growing PAGA industry.

Many PAGA violations are simple, innocuous technical errors or, in some circumstances, an “error” that was a consequence of the employee’s free choice (such as a flexible lunch break). In these cases, the employee is not whom we traditionally think of as an “aggrieved party.” Yet the consequences for employers for even minor technical violations or a violation that is the result of the employee’s free choice (such as choosing when to take their lunch break) can easily wind up being millions of dollars in liability. In addition to the liability employers face, these expensive PAGA claims can force businesses to lay off other employees and, in some circumstances, shut their doors completely.

PAGA needs significant reforms to return the statute to its original intent. It was never meant to be a vehicle for punishing businesses for minor technical violations with liability in the multimillions and giant fee awards payments to plantiffs’ lawyers.

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