California PAGA Law Benefits Attorneys More Than Employees
Topics: Class Actions, Legal Information, Wage & Hour Issues
Last week, former CDF Labor Law attorney, and current CEO of the California Chamber of Commerce (“Cal Chamber”), Jennifer Barrera, published a compelling argument surrounding the issues concerning the California Private Attorney General Act and a ballot measure on the Act coming up next year. California Law Helping Workers File Labor Claims Needs Reform - Advocacy - California Chamber of Commerce (calchamber.com). According to Ms. Barrera’s article, over the last six years, attorneys representing employees on PAGA claims obtained an eight billion dollars in PAGA settlements from California employers-- an astonishing amount. Ms. Barrera’s article also indicates that despite this number, individual employees receive a pittance from these actions. The article cited to a 2019 report from former California Labor Commissioner Julie Su and other officials of the California Labor Commissioner’s office that expressly provided that “The substantial majority of proposed private court settlements in PAGA cases review by [the Labor Commissioner’s office] fell short of protecting the interests of the state and workers.“
Ms. Barrera and the Chamber indicate that more than 1/3 of the settlement amounts end up in the hands of the attorneys while individual workers often barely benefit from these claims, because the settlements are generally spread out between all the aggrieved employees.
To remedy this issue, Cal Chamber has helped to place a ballot measure on the 2024 ballot that will amend the existing PAGA law to put prosecution of these claims for penalties back in the hands of the California DLSE/Labor Commissioner. The ballot initiative supporting materials indicate that the proposal set forth in the initiative will allow workers the opportunity to recover one hundred percent of the PAGA penalties, when pay practices are challenged. This ballot measure is referred to as the California Fair Pay and Accountability Act. Last summer, the California Secretary of State announced that the ballot initiative received enough supportive signatures to be placed on the 2024 ballot for California voters to decide.
The California Fair Pay and Accountability Act:
- replaces PAGA with an alternative enforcement mechanism managed by the state;
- helps to ensure that 100% of recovered penalties go to the employees, and not private attorneys; and
- doubles the penalties currently available when the employee can prove that the employer willfully violated the law.
California employers should review this ballot measure and keep an eye on it as we draw closer to the 2024 election. In the meantime, it is worthwhile to review the ballot measure and take a look at Ms. Barrera’s article, both of which are linked above.
