Though it certainly has a long way to go, a proposed ballot measure to replace the Private Attorneys General Act (PAGA) is underway in California. PAGA is the 2004 law that allows an employee to stand in the shoes of a California state attorney general to bring wage and hour lawsuits against employers. Critics argue that private attorneys have abused the law by bringing frivolous lawsuits and keeping a hefty share of the settlements, while the allegedly aggrieved employees often receive very little.
What does the ballot initiative do?
The ballot initiative would replace PAGA with the California Fair Pay and Employer Accountability Act. According to the initiative filed with the Attorney General’s Office, the purpose of the law would be to:
- Create better results for employees without requiring they hire an attorney
- Leave enforcement of labor laws up to independent state regulators
- Double the current statutory and civil penalties for companies that violate the law
- Require that the harmed employee receive 100% of the monetary penalty
- Assist employers with resources and guidance to ensure they are applying the laws correctly
The group proposing the initiative, Californians for Fair Pay and Accountability, argues that these changes would make for a more efficient enforcement system that would put the money directly in the hands of the harmed employees while cutting out the private attorneys currently making the most money from the system.
What to do in the meantime
PAGA lawsuits are very costly for employers. Penalties add up quickly, as they are assessed for each Labor Code violation, for each employee, for each pay period, for the entire statutory period of liability. Prudent employers should take measures such as conducting payroll audits to ensure their practices are legally compliant in an effort to avoid liability in the first place.