What Is PAGA?
What is PAGA? That’s a common question that employees and employers have.
Essentially, the Private Attorneys General Act (PAGA) allows an employee to file a claim against their employer if the employer violated employment law.
We’ll discuss PAGA in depth here.
Who Does PAGA Cover?
Under PAGA, an “aggrieved” employee—who is defined as any current or former worker subjected to one or more of the alleged employment violations—has the authority to sue their employer for Labor Code violations. Prior to 2004, when the legislation was enacted, only a state agency could bring a law enforcement action.
PAGA’s Penalty Provisions
Each initial PAGA violation is subject to a $100 penalty per pay period for each affected employee. If the employer has previously violated the same code provision, they are subject to a $200 fine per violation. Due to the additive nature of the penalties, there is a high risk of massive financial liability for an employer if a PAGA lawsuit emerges.
Of the fines collected, 25% of the civil penalties recovered go to the employee(s), who may also recover attorney fees and court-filing costs. 75% of the recovery amount is distributed to California’s Labor and Workforce Development Agency to help with labor-law enforcement and to educate employers and employees about their rights and responsibilities under state law.
What is PAGA’s Scope?
PAGA applies to many different violations under the California Labor Code, including:
- Failing to provide itemized wage statements;
- Terminating an employee while they are out on leave;
- Failing to provide suitable seating if it’s requested;
- Failing to pay overtime;
- Misclassifying an employee as an independent contractor;
- Improperly rounding hours;
- Failing to provide mandatory meal and rest breaks;
- Failing to pay minimum wages and/or overtime premiums;
- Not reimbursing an employee’s reasonable business expenses;
- Failing to make timely wage payments;
- Not including bonuses and other forms of compensation in a regular pay rate for purposes of calculating overtime compensation; and
- Making health and safety legal missteps.
This is not, however, an exhaustive list. The reality is that practically any employment claim may be brought under PAGA.
Lawsuits under the Private Attorneys General Act have the potential to lead to high payouts. For instance, in 2018, Wal-Mart settled a PAGA lawsuit for $65 million on claims it failed to provide cashiers with suitable seating when they requested that accommodation.
PAGA is undeniably a pro-employee statute. For instance, employment agreements that restrict employees from filing class-action lawsuits or require them to arbitrate employment disputes are not enforceable under PAGA. Also, courts have found that language explicitly waiving an employee’s right to file a PAGA claim violates public policy and therefore is not enforceable.
The bottom line: PAGA claims can be a streamlined way to hold employers accountable for wrongdoing, but there are particular notices and other procedural requirements to meet before an employee can file suit.
Turn to an Attorney for Answers on PAGA
The employment attorneys at the Workplace Rights Law Group are available to address specific concerns arising from the “what is PAGA” question. Contact our firm to set up a complimentary consultation to discuss any particular concerns you have about this important question.
PAGA Settlements: The Process and the Potential Payout for Employees
Filing an employment claim can result in lengthy legal battle. But, for employees bringing claims under the California Private Attorneys General Act (PAGA), their legal resolution may come faster and more efficiently.
The Mechanics of a PAGA Settlement
A court must approve any settlement of a claim or claims brought under California’s Labor Code Private Attorneys General Act (PAGA).
While PAGA claims are similar to class-action suits in many respects, the requirements for court approval of a settlement are less stringent. For this reason, PAGA claims may settle more quickly and in a more effective way than typical class-action lawsuits.
However, a PAGA lawsuit may include a variety of claims that aren’t typical of a class-action lawsuit. One PAGA suit may include both individual claims (on behalf of one person) and representative claims (on behalf of many people). Even after parties reach a settlement on representative claims, there may be individual claims that need to be sorted out through arbitration. In that case, any settlement of the PAGA case would be delayed until those claims are resolved.
A Closer Look at PAGA Settlement Payouts
There are plenty of recent settlements illustrating how expensive PAGA claims can be for an employer. For example, in 2019, janitorial service provider ABM Industries settled for $5.4 million after it allegedly failed to reimburse employees for using their personal cell phones to communicate with managers and clock in and out.
But the road to settlement approval may not be easy. For example, in 2019, a judge refused to approve an $11.5 million settlement in a case alleging that Postmates Inc. had misclassified delivery couriers as independent contractors, citing “significant concerns” and asking the parties to provide more information concerning the settlement proposal.
There are several open-ended issues that the legal community is contending with concerning PAGA settlements, such as:
- What is required to give proper notice of a PAGA settlement?
- Are employees who were not party to the lawsuit entitled to receive notice of the PAGA settlement?
- Should employees not directly involved in the lawsuit be heard at the settlement hearing to approve the order?
Fortunately, in March 2020, the California Supreme Court answered one of the biggest questions in Kim v. Reins International California, Inc. The court decided that an employee who settles individual claims can still file a PAGA lawsuit.
But there are other legislative developments that could impact PAGA settlements. Right now, the California Legislature is considering SB 1129, which would expand the amount of time employers have to cure itemized wage statement violations from 33 to 65 calendar days.
Suffice to say, the issues surrounding PAGA settlements are not cut and dry. Each proposed settlement must be considered on a case-by-case basis. Therefore, it’s best to have competent legal counsel sort through the issues to achieve the best resolution.
What’s the First Step Toward Obtaining a PAGA Settlement?
Filing a PAGA claim is the first step. And to do so, employees should have competent legal counsel by their side. At Workplace Rights Law Group, our attorneys have nearly 100 years of combined employment law experience. Clients in Southern California and across the state turn to our team to apply unique strategies that are customized to their particular circumstances. If you have questions about the road to a PAGA settlement, contact us today.