The Private Attorneys General Act (PAGA), enacted in 2004, upturned California’s employment law landscape. In theory, PAGA allowed employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the state arising from Labor Code violations. In reality, PAGA created great opportunities for frivolous employment claims benefiting plaintiff attorneys far more than the employees that the law was designed to protect.
As we described in a previous blog post, Assembly Bill (AB) 2288 and Senate Bill (SB) 92 introduced sweeping reforms to PAGA, including:
- Increased pre-filing requirements, allowing employers to cure certain violations and prevent lawsuits;
- Increased judicial authority to determine manageability of claims;
- Limited PAGA claims to only those that the Plaintiff personally suffered, to address PAGA plaintiffs’ efforts to pursue the kitchen sink of alleged Labor Code violations that they did not experience;
- Limited PAGA claims to those that occur within the one-year statute of limitations, to address recent caselaw used by PAGA plaintiffs to argue in support of claims outside the one-year limitations period; and
- Reduced the penalties and eliminated stacking of civil penalties based on certain derivative violations.
One purpose of the reforms was to reduce the number of PAGA lawsuits. But the question remains: Have the reforms worked? The new law applies to lawsuits in which a PAGA notice letter was submitted to the Labor Workforce Development Agency (“LWDA”) on or after June 19, 2024.
However, the number of PAGA notice letters that were submitted to the LWDA compared to 2023 tells a different story:
While there was a significant spike in filings immediately following the enactment, the overall number of filings in July and August 2024 shows a slight decrease compared to the same time in 2023. Indeed, the numbers suggest that while the initial response to the new law may have led to an increase in filings, the long-term trend could be a stabilization or even a slight reduction in the number of PAGA claims.
CDF’s Wage and Hour Task Force will remain on top of the most pressing information needed for employers and will update you with more data on how the courts wrestle with the new reforms.
