PAGA Reform Moves Forward: What Employers Need to Know

The Amtec Team

June 27, 2024

In a significant development for California employers, the long-awaited PAGA (Private Attorneys General Act) reform is advancing through the legislative process. Floor votes are scheduled for Thursday (June 27), marking a critical step toward addressing long-standing concerns associated with PAGA litigation.

What is PAGA?

PAGA, enacted in 2004, allows employees to file lawsuits against employers for labor code violations on behalf of the state. This act has led to a surge in litigation, often resulting in costly settlements for businesses. While PAGA was initially intended to empower employees and enforce labor laws, it has also been criticized for creating a litigation environment that disproportionately burdens employers.

Key Provisions of the Reform

The proposed reform aims to strike a balance between protecting employees’ rights and reducing frivolous lawsuits that exploit PAGA for financial gain. Key provisions include:

1. Stricter Filing Requirements: The reform introduces more stringent criteria for filing PAGA claims, ensuring that only legitimate cases proceed to court.
2. Enhanced Mediation Process: Before a lawsuit can be filed, there will be a mandatory mediation process aimed at resolving disputes without resorting to litigation.
3. Increased Oversight: The reform proposes greater oversight of PAGA claims by the Labor and Workforce Development Agency (LWDA), which will have the authority to review and intervene in cases.

Implications for Employers

For employers, the passage of PAGA reform could mean significant relief from the burdens of unwarranted lawsuits. Here are some potential benefits:

• Reduced Legal Costs: With stricter filing requirements and mandatory mediation, employers could see a reduction in legal expenses associated with defending against PAGA claims.
• Fairer Litigation Environment: The reform seeks to ensure that only genuine claims reach the courts, promoting a more balanced legal landscape.
• Improved Employer-Employee Relations: By focusing on mediation and dispute resolution, the reform encourages constructive dialogue between employers and employees, potentially leading to better workplace relationships.

Next Steps

As the reform moves to the floor for votes, employers should stay informed and engage with advocacy groups supporting the changes. The outcome of the vote will have significant implications for the business community, and active participation can help shape a fairer and more effective labor law enforcement system in California.

For more detailed information on the PAGA reform and its potential impact, you can read the full article here.