California PAGA amendments: Key reforms

Employers facing lawsuits under California’s Private Attorneys General Act (PAGA) will have more opportunities to correct alleged Labor Code violations and face lower penalties under amendments signed into law by Governor Gavin Newsom. At the same time, employees will see a larger portion of civil penalties awarded.

The amendments were the result of bipartisan negotiations with input from both business groups and labor advocates. AB2288 and SB92 were fast-tracked to prevent an initiative to repeal PAGA from being placed on the ballot in November. The bills were introduced June 21, passed by the legislature on June 27 and signed by the governor on July 1.

California’s law — the only statewide law of its kind — authorizes any “aggrieved employee” to sue an employer on behalf of themselves and other current or former employees to enforce a violation of any provision of the state Labor Code that provides for a civil penalty. The employee stands in place of the California Labor and Workforce Development Agency in the lawsuit and shares a portion of any civil penalty awarded.

Key reforms of PAGA include:

• Increasing the civil penalties awarded to employees from 25 percent to 35 percent.
• Allowing courts to order injunctive relief.
• Increasing employers’ right to cure violations before civil penalties are imposed.
• Capping total penalties at 15 percent of the penalties sought for employers who demonstrate that they have taken all reasonable steps to cure alleged violations before receiving a PAGA notice, and at 30 percent for employers who do so within 60 days of the notice.
• Requiring an employee who files a PAGA lawsuit on behalf of a group of employees to have personally experienced each of the labor law violations alleged in the claim, rather than just having experienced one of the several violations listed.
• Granting courts greater authority to manage the scope of claims and the evidence presented at trial.

The amendments went into effect upon signing and only apply to civil actions brought on or after June 19, 2024.