The PAGA ballot was recently held on June 27, 2024, and the reform was signed into effect on July 1, 2024.
The PAGA Reform Elements
The overhaul of PAGA included legislation SB 92 and AB 2288. These two bills will limit the types of employees who can bring claims, allow employers to cure mistakes, reduce penalties, and boost procedural mechanisms that will reduce court claims.
Changes to the Penalty Structure
The reform offers penalty reductions for employers who actively take compliance steps before receiving a PAGA notice and for employers who are quick to fix their policies after receiving a notice. It also increases the penalty allocation for workers from 25% to 35%.
Changes to PAGA Litigation Standards
The changes to this include limits on individuals pursuing relief for employees who suffered the same violations. Employers can also motion the court to seek limitations before the trial. Employees are also prohibited from trying to combine PAGA penalties.
Updated Cure Processes for Small and Large Employers
Employers with less than 100 employees can submit a proposal for their violation within 33 days of notice. Employers with over 100 employees can seek an early evaluation once their lawsuit is filed.
Penalty Reductions
There was a $100 penalty for each employee per pay period for the first violation; however, employers had concerns about the penalty amount. If an employer takes compliance steps before receiving a record request, their civil penalty won’t be more than 15% of $100. Also, within 60 days of notice, employers can find further relief if they begin compliance steps.
The Next Steps
With PAGA in effect, California employers should take the next steps toward compliance in their organizations. This includes training, updating policies, and conducting audits.