Governor Newsom and legislative leaders have announced a major reform agreement for California’s Private Attorneys General Act (PAGA). Initially enacted in 2004, PAGA California Code, LAB 2699, imposed penalties upon employers through representative actions, awarding successful PAGA individuals and representative classes 25% of the PAGA penalties, while the State of California collected 75%. The past decade’s surge in PAGA-related litigation has prompted persistent calls for reform from the business community and labor groups.
Assembly Bill 2288 caps penalties for employers who promptly rectify violations and introduces higher penalties for malicious violations. It expands Labor Code sections eligible for rectification and enhances protections for small employers through a more robust cure process, while increasing the share of penalties going to employees from 25% to 35%. Courts can now impose injunctive relief, and employees must personally experience a violation to file a PAGA claim.
The California Fair Pay and Employer Accountability Act of 2024 will be withdrawn from November’s ballot once the legislature enacts this reform agreement. This reform must be passed by June 27, 2024, to allow time for withdrawal, and we can expect to see an amended bill in the coming days.
For more information about this article, please contact Bicvan Brown at bbrown@tresslerllp.com.