/>iAfter being plagued for two decades with claims brought under the California Private Attorneys General Act (“PAGA”), recent reforms mean employers may now see a decrease in (though not an elimination of) such claims. PAGA authorizes aggrieved employees to bring a civil action against an employer to recover penalties on behalf of themselves and other employees.
On July 1, 2024, Governor Newsom signed PAGA reform into law. The reform includes: increasing the employee share of recovery (previously 25%, now 35%); increasing penalties for malicious employer conduct; capping employer liability where the employer attempted to comply with the Labor Code before receiving a PAGA notice (15% cap on penalties sought) and after receiving a PAGA notice (30% cap); reducing penalties for short-lived or technical violations; equalizing penalties for employers who pay on a weekly as opposed to a bi-weekly basis; increasing cure opportunities; providing early resolution opportunities; and codifying that a court has discretion to adjust the amount of penalties and limit the scope of claims presented at trial to allow for manageability. Additionally, the reform indicates that a representative plaintiff, in order to have standing to bring a PAGA claim, must have experienced all of the alleged PAGA violations within the 1-year statute of limitations. PAGA reform is considered effective as of June 19, 2024 and applies to lawsuits, including LWDA notices, initiated on or after June 19, 2024.
Restaurants should familiarize themselves with this new law and evaluate their wage and hour compliance, including opportunities to cure.
