California’s PAGA Reform Deal Becomes Law

On June 17, 2024, an agreement was reached between Governor Gavin Newsom and business and labor groups to reform the state’s Private Attorneys General Act (PAGA). On June 21, 2024, the two bills aimed at reforming PAGA, Assembly Bill (AB) 2288 and Senate Bill (SB) 92, were formally introduced in the legislature. On July 1, 2024, both these bills were signed into law. Both employers and employees need to understand what the signing of AB 2288 and SB 92 means. In this article, we discuss the key changes brought about by AB 2288 and SB 92.

What is PAGA?

This state law, which was enacted in 2004, protects employees from employers against Labor Code violations on behalf of themselves and other employees. PAGA gives employees the power to act as private attorneys general, allowing them to seek civil penalties for various Labor Code violations. Examples of violations that PAGA claims can address include unpaid wages and meal and rest break violations.

Key Changes Brought About by AB 2288 and SB 92

The signing of AB 2288 and SB 92 brings several key changes to PAGA. Below is a look at some of these changes;

1.Standing

Before, employees were allowed to pursue penalties for other employees’ violations without being personally affected. Employees can no longer file a PAGA claim if they have not personally experienced the alleged Labor Code violation(s). However, actions brought by certain nonprofit legal aid associations are exempt from this new provision.

2. Statute of Limitations

AB 2288 and SB 92 clarify that the one-year PAGA statute of limitations applies to the violation(s) a plaintiff must experience. In other words, PAGA plaintiffs do not have standing if they suffered a Labor Code violation outside the applicable one-year statute of limitations.

3. Changes to PAGA’s Penalty Structure

The signing of AB 2288 and SB 92 introduced, among others, the following changes to PAGA’s penalty structure;

• Employees will now receive a greater portion of the awarded penalties. Previously, aggrieved employees received 25% of any award under PAGA. Now, employees will receive 35% of the award. The Labor & Workforce Development Agency (LWDA) will now receive 65% of any award under PAGA, down from 75%.
• Limitations on penalties for employers who promptly take reasonable measures to comply with the Labor Code, rectify practices and policies, and make employees whole.
• Limitations on penalties for wage statement violations that don’t result in harm to the employee.
• Higher penalties for employers who act oppressively, fraudulently, or maliciously in violation of labor laws. 

4. Injunctive Relief

Previously, afflicted employees could only recover civil penalties under PAGA. AB 2288 and SB 92 now allow employees to seek injunctive relief.

5. New Cure Provisions

Cure provisions allow employers to fix the alleged Labor Code violations included in a PAGA notice. SB 92 expands the Labor Code sections that can be cured. More violations that can now be cured include expense reimbursement, meal/rest period premiums, and wage statements.

Contact a California Employment Lawyer

Contact a California employment lawyer if you need more information on AB 2288 and SB 92 or help with an employment law-related matter.