What is PAGA?

“Paga” means “pay” in Spanish, which is an apt acronym for the California Labor Code Private Attorneys General Act (“PAGA”).

In California, PAGA authorizes aggrieved employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for an employer’s Labor Code violations.  The aggrieved employees generally retain 25% of any civil penalty recovered and the remaining 75% goes to the California Labor and Workforce Development Agency (LWDA).  Additionally, the aggrieved employee may bring separate claims for penalties the are directly recoverable by the employee.  In short, a PAGA claim allows an employee to step into the state’s shoes to enforce certain labor code violations as it applies to the employee and other employees.  Since employees who prevail on PAGA claims could recover attorney’s fees and costs in addition to the penalties as they apply to each employee, an employer’s potential exposure on PAGA claims are quite significant.

Sending a written notice of a PAGA claim by certified mail to an employer (and online to the State of California) is the first step to bringing the civil lawsuit.

I received a written notice of PAGA claim, what do I do?

If you are an employer and you received a notice of PAGA claim DO NOT ignore it.

What happens after an employee provides notice of PAGA claim?

The LWDA will decide whether to investigate the employee’s claim.

If the LWDA decides not to investigate, the employer will receive a notice from the LWDA within 60 days after the postmark date of the employee’s notice.  The employee may then file a civil suit.

If the LWDA intends to investigate the alleged violation, it must notify the parties within 65 days and has 120 days to issue a citation.  If the LWDA issues a citation or initiates a wage collection proceeding, the employee may not initiate a private action for the same violations.

Is it too late to fix the violations?

If upon receiving the notice of PAGA claim, you realize that your company’s practices do in fact violate the Labor Code, depending on what the violations are, you may have the opportunity to “cure” the violation.  “Cure” means the employer abates each violation alleged in the aggrieved employee’s notice, is in compliance with the Labor Code provisions specified in that notice and makes the employee whole.

Unfortunately, most of the important Labor Code provisions governing compensation, working hours, and employee rights and privileges, as well as workplace safety violations covered by Labor Code. § 6300 are not subject to “cure.”  However, other unspecified Labor Code violations do provide employers with a right to “cure” the violation.  Examples of unspecified violations that allow an employer to “cure” the violation include misclassifying employees as exempt from overtime pay or failing to adopt an injury and illness prevention program.

An employer has 33 days to cure alleged violations and must give written notice within that period of time by certified mail to the aggrieved employee or representative and by online filing with the LWDA, including a description of actions taken.  If the alleged violation is not cured within the 33-day period, the employee may commence a civil action.

However, if the aggrieved employee disputes that the alleged violation has been cured, the he or she would have to provide a written notice by online filing with the LWDA and by certified mail to the employer, including specified grounds to support that dispute.  Within 17 calendar days of the receipt of that notice, the agency shall review the actions taken by the employer to cure the alleged violation, and provide written notice of its decision by certified mail to the aggrieved employee and the employer.  The agency may grant the employer three additional business days to cure the alleged violation.  If the agency determines that the alleged violation has not been cured or if the agency fails to provide timely or any notification, the employee may proceed with the civil action pursuant to Section 2699.  If the agency determines that the alleged violation has been cured, but the employee still disagrees, the employee may appeal that determination to the superior court.

PRACTICAL TIP:  As you can see, it takes significant time and resources for an employer to address a PAGA claim.  The procedure and deadlines are extremely specific, which means that employers would greatly benefit from the assistance of a professional who could guide you through the process.  However, the best position to be in is to prevent the receipt of a PAGA claim notice in the first place. Employers may do so by conducting an audit of its employment practices. Contact me at (949) 529-0007 to identify your greatest areas of exposure.

Learn more about California employment laws.

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In: Employment Law

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