PAGA And The Three Bills: New Legislation Aims To Keep Plaintiffs’ Attorneys Out of Employers’ Porridge

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08/23/2017

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PAGA And The Three Bills: New Legislation Aims To Keep Plaintiffs’ Attorneys Out of Employers’ Porridge

 By: Riha Pathak

The Private Attorneys General Act (PAGA) allows employees, who comply with certain notice and filing requirements, to bring lawsuits for Labor Code violations and recover civil penalties on behalf of themselves, other employees, and the State.  Although PAGA was created to enable employees to pursue claims that the State lacked the resources to pursue, PAGA has become an exploited and abused tool for plaintiffs’ attorneys to line their own pockets. Under the current provisions of PAGA, employers face duplicative penalties, limited procedural safeguards, and costly litigation.

For years, some Legislators have attempted to curb PAGA’s excesses. Some Bills were successful, such as AB 1506 (2015), which gave employers the ability to fix paystubs to include the pay period’s start and end dates, and to fix their legal name and address, as further discussed here. Other Bills have not been successful, such as AB 2463 (2016), which was an attempt to establish a $1000 penalty cap for each aggrieved employee. Notably, eight of the nine PAGA Bills introduced last session did not pass.

So far in 2017, two Legislators are continuing the fight to make PAGA better with three new Bills.

First, Assembly Member Salas introduced AB 281. This Bill does three things:

  • PAGA currently allows an employer 33 days to cure certain Labor Code violations before an employee can bring a lawsuit. This Bill would extend the 33 day time-period to 65 days, allowing the employer almost twice as much time to cure a violation.
  • Even after the passage of AB 1506 in 2015, PAGA allows very few labor code violations to be cured before an employee can file a lawsuit. This Bill would expand an employer’s ability to cure various Labor Code violations to include common wage and hour violations. Essentially, only health and safety violations would remain incurable if this Bill is enacted.
  • This Bill amends the law so an employee could only recover the civil penalties for violations actually suffered by that employee. 

 

 

 

 

 

 

 

Second, Assembly Member Fong introduced AB 1429. This Bill could limit the Labor Code violations an employee can use as a basis for a PAGA lawsuit to violations of:

  • Labor Code Section 226, which requires fully compliant itemized wage statements.
  • Labor Code Section 226.7, which requires employers to provide meal and rest periods.
  • Labor Code Section 510, which prescribes 8-hour workdays, 40-hour workweeks, and requires employers to pay overtime compensation.
  • Labor Code Section 515, which regards classification of overtime exemptions.

Finally, Assembly Member Fong also introduced AB 1430. Currently, PAGA requires an aggrieved employee to notify the Labor Workforce Development Agency (“LWDA”) of any Labor Code violations before the employee can bring their lawsuit. This Bill would require the LWDA to investigate the violation and either (1) issue a citation or (2) determine if there is a “reasonable basis” for a civil action before an employee is permitted to file a lawsuit.

COUNSEL TO MANAGEMENT:

Although these Bills would make different changes to PAGA, they would all be favorable changes for employers. These three Bills illustrate some Legislators’ determination to change PAGA for the better by providing more procedural requirements for a plaintiff’s attorney and limiting the type of violations that can serve as the basis for a lawsuit. However, as noted above, PAGA Bills do not have a history of much success. We will keep you updated as these Bills make their way through the political process. In the meantime, if you have questions about PAGA lawsuits, contact the experts at The Saqui Law Group.
 

 

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