LWDA Publishes PAGA Frequently Asked Questions
Topics: PAGA
The California Labor & Workforce Development Agency (“LWDA”) recently published Frequently Asked Questions pertaining to the Private Attorneys General Act (“PAGA”) and the recent amendments that impact PAGA claims after June 19, 2024.
Previously, CDF provided guidance on the PAGA reforms introduced by Assembly Bill (AB) 2288 and Senate Bill (SB) 92.
The FAQs address one of the most significant reforms, the stricter standing requirement that a PAGA plaintiff represented by private counsel is limited to seeking PAGA penalties for alleged labor code violations the employee personally experienced. The stricter standing requirement does not apply to plaintiffs represented by non-profit legal organizations, who, like under prior law, may seek PAGA penalties based on alleged violations they did not personally experience, as long as the employee claims to have experienced at least one labor code violation.
The FAQs specify that for claims based on post-June 19, 2024 PAGA notices, 65 percent of recovered penalties go to the State and 35 percent go to the aggrieved employees (and Courts may award injunctive relief). And, as before, for PAGA notices pre-June 19, 2024, recovered penalties will continue to be distributed as 75 percent to the State and 25 percent to the aggrieved employees.
The FAQs also address limitations on recoverable penalties. With some exceptions, the maximum civil penalty will be capped at 15 percent of the maximum penalty if the employer took all reasonable steps to comply with the law prior to receiving the PAGA notice, or at 30 percent if the employer takes all reasonable steps to achieve compliance within 60 days of the PAGA notice. It remains to be seen how the courts will define the “all reasonable steps” standard.
The FAQs specify that employers may take new steps to cure certain violations. Within 33 days of the PAGA notice, the employer must give written notice to the aggrieved employee and to the LWDA that the alleged violations have been cured, with a description of the actions taken, including specific requirements for alleged wage statement violations and alleged violations involving unpaid wages. Effective October 1, 2024, employers with fewer than 100 employees may first, within 33 days of the PAGA notice, submit a cure proposal to the LWDA and then work with the LWDA to ensure the violations have been cured.
Also, employers of any size may request a stay of court proceedings and an early evaluation conference with a neutral evaluator, which is intended to facilitate early evaluation and resolution of the lawsuit. However, it is not clear how this will be carried out.
CDF will provide updates on further clarification, court decisions or additional guidance released by the LWDA. If you have any questions about this blog post, please contact your favorite CDF attorney.