On June 27, 2024, California Governor Gavin Newsom signed Assembly Bill 2288, which amends Labor Code Section 2699 and provides some relief to businesses under the threat of a PAGA claim in class action lawsuits for labor code violations.
In 2004, the California Legislature, in an attempt to enforce employer compliance with labor laws, enacted the Private Attorneys General Act (PAGA), which gave employees the ability to file lawsuits for various labor code violations. The lawsuits would allow the recovery of civil penalties on behalf of the employee, other employees, and the State of California. Since its enactment, it has turned into the vehicle by which plaintiffs’ attorneys file class action lawsuits, most often for wage and hour or pay stub violations, no matter how minor.
Reform of the law has been elusive. After significant effort on the part of the business community, PAGA was set to appear on the November ballot and the law likely would have disappeared altogether. To “save” PAGA, lawmakers decided to work with the business community and reached an agreement to reform the law and improve the process for both businesses and workers.
Some of the key provisions of the new law include a right-to-cure process, a procedural mechanism to allow employers to seek limitations on the scope of the aggrieved employee population, and significantly reduced penalties. The new statute allows for and rewards employers for attempted and actual compliance with the labor law, once the employer is on notice of potential violations.
The new version of PAGA will affect civil suits brought on or after June 19, 2024, so current or ongoing litigation initiated prior to that date is not affected by the new law. Employers Council’s California Legal Services Team can assist you in navigating this new guidance, as well as providing recommendations for policy updates. Please contact our team at CAinfo@employerscouncil.org.
Mary Miller is an attorney for Employers Council.