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On June 27, 2024, California Governor Gavin Newsom signed Assembly Bill 2288, thereby reforming PAGA and amending Labor Code Section 2699. Passed in 2004, PAGA authorizes aggrieved employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for various Labor Code violations. Since its passing, it has become a powerful tool for plaintiffs seeking to add to class action lawsuits or equally common on its own as the sole cause of action.
PAGA was slated to appear on the November ballot, which would risk getting rid of the law for good. In response, lawmakers worked with employers to reach an agreement regarding reform to the law. After all, the pre-reform PAGA called for 75% of civil penalties recovered to be allocated to the Labor and Workforce Development Agency (LWDA). Ultimately, a compromise was reached and PAGA 2.0 came to be.
The amended PAGA will only affect cases where the PAGA notice was issued on or after June 19, 2024.
So, what does PAGA look like moving forward? Here are some of the key provisions of the reformed PAGA that employers should keep in mind:
When assessing the reasonableness of an employer’s conduct in remedying violations, factors to consider include the nature, severity, and duration of the alleged violations. The fact that a violation exists is not enough to show that an employer failed to take all reasonable steps.
If an employer fails to accurately state the name and address of the employer on the wage statement, it can cure by showing that it provided notice of the correct information to each aggrieved employee in writing. For other 226(a) violations, the employer may cure by issuing fully compliant wage statements to each aggrieved employee for each pay period in which the violation occurred going back three years from the time the employer was put on notice.
The amendments to PAGA reflect the state’s interest in protecting employees while also considering the stress that the statute has caused for employers. In the spirit of effectuating real reform, this new version of the popular statute rewards employers for attempted and actual compliance once on notice of potential violations. Nonetheless, employers should proactively revisit their wage and hour policies to ensure compliance with everchanging California laws.
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