Navigate the Reformed Private Attorneys General Act
Governor Gavin Newsom has just signed Assembly Bill 2288 and Senate Bill 92. This reform to the Private Attorneys General Act (PAGA) affects how California labor code violations are addressed.
The law is a compromise reached between labor, the legislature, and business organizations looking to strike a balance between reasonable work protections and the removal of frivolous lawsuits.
This compromise also means a PAGA reform measure will no longer be on the November ballot.
What You Need to Know
This new PAGA reform reduces frivolous lawsuits and gives employers more chances to fix labor law violations.
Key Points:
- Employees must personally experience violations to file claims.
- More violations can be fixed before lawsuits happen.
- Penalties are capped if employers quickly address issues.
- Employees get a larger share of penalties (35% instead of 25%).
- Limits the scope of claims allowed in court.
- Allows courts to order businesses to fix labor law violations.
- It gives the Department of Industrial Relations (DIR) the power to hire staff and fill vacancies quickly.
How It Impacts You
While PAGA was created to protect employees, it often led to unnecessary lawsuits.
Small businesses faced high legal costs and uncertainty, leading many to settle lawsuits to avoid shutting down. Many businesses that may have made minor errors were forced to pay extreme legal costs that far outweighed the actual cost to remedy an error.
The reform helps limit when lawsuits can be filed and gives businesses more time to fix violations.
Employers can also save up to 85% on penalties by doing simple things like audits, policy updates, training programs, and keeping accurate records.
With fewer unnecessary lawsuits and lower legal costs, businesses can grow.
California Chamber of Commerce says these “reform measures will create more fairness in the process for small businesses and, importantly, incentivize them to understand and comply with labor laws that impact their workforce to the benefit of all.”
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