With the stated purpose of reducing “unnecessary litigation” and lowering the cost for employers doing business in California, on June 27, 2016 Governor Brown signed SB 836, an amendment to California’s Private Attorneys General Act (“PAGA”) as well as a host of other laws. The PAGA grants employees the authority to sue for Labor Code violations on behalf of themselves and other employees as a representative of the California Labor and Workforce Development Agency (“LWDA”) as a private attorney general through their counsel. Due to massive non-compliance with the Labor Code and in an effort to avoid binding arbitration, numerous lawsuits have been filed against California employers over the last few years seeking penalties, interest and attorneys’ fees and costs as well.
These amendments apply to PAGA cases filed on or after July 1, 2016. They are limited to cases alleging violations of the California Labor Code provisions listed in Labor Code section 2699.5.
The amendments fall into four large categories: (1) the cost and procedure for filing a PAGA action; (2) the timing of PAGA actions; (3) what information and documents must be provided to the LWDA; and (4) the procedure that an employer must follow to cure PAGA violations. Each amendment goes into effect on July 1, 2016, and does not affect PAGA notices filed before that date. The new amendments give the LWDA more oversight over PAGA claims as follows:
- The LWDA now has 60 days to review PAGA notices. (Previously 30 days.)
- Employee notices to the LWDA must be submitted online along with a $75 fee.
- Employers’ cure notices to the LWDA must be submitted online.
- A PAGA plaintiff cannot commence a civil action until 65 days after sending notice of claimed violations to the LWDA. (Previously it was 33 days.)
- The LWDA has 65 days to notify the plaintiff and employer of its intent to investigate. (Previously it was 33 days.)
- For cases filed on or after July 1, 2016, the LWDA may extend its deadline to issue citations to up to 180 days, and the LWDA must be served with a copy of any PAGA complaint filed in court.
- The LWDA must be provided with a proposed PAGA settlement at the same time as the settlement is submitted to a court for the court’s required approval.
- The LWDA must be provided with any court order that approves or denies a settlement of PAGA claims.
It remains to be seen how the amendments will impact California employees and employers in PAGA litigation. Will the LWDA actively object to settlements or allocations to the state it feels are too small? Will a test or metric develop to ensure that so long a X% of a hybrid class action – PAGA settlement goes to the LWDA there will be no objection? Will someone be publishing an opinion letter soon please?
Some of the amendments, such as the increased cure period, provide obvious benefits to employers, while others, such as the $75 filing fee for LWDA notices, likely will not have any effect. For other amendments, such as the ones that give the LWDA an active role in the settlement of PAGA claims, the impact will not be clear for some time.
The new amendments do not contain additional funding for the LWDA to increase its involvement in PAGA actions. As a result the responsibility for enforcing PAGA claims will continue to rest with employment attorneys like Quintilone & Associates
If you have any questions about the PAGA Amendments or have issues with unpaid wages, commissions, company charges to your wages, business expenses, off the clock work, or any issues with your pay at your current employer, please feel free to contact: