The California Secretary of State announced on July 22, 2022, that a measure to replace the California Labor Code Private Attorneys General Act of 2004 (“PAGA”) qualified as an eligible statewide ballot measure for the November 2024 General Election ballot. PAGA allows “aggrieved” employees to file a representative action on behalf of themselves and other “aggrieved” employees and the state of California for certain alleged California Labor Code violations. Proponents claims PAGA has benefited attorneys, not workers.
The California Fair Pay and Employer Accountability Act (“FPEAA”) would place workers’ labor claims back with the Labor Commissioner. This would provide an opportunity for these labor claims to be handled without the need for employees to hire a private attorney. The proposed law also (i) eliminates the Labor Commissioner’s authority to contract with private organizations or attorneys to assist with enforcement; (ii) requires the Legislature to provide funding for Labor Commissioner enforcement; (iii) requires the Labor Commissioner to provide pre-enforcement advice; (iv) allows employers to correct identified labor-law violations without penalties, awards all penalties to the “aggrieved” employee, and authorizes increased penalties for willful violations.
This initiative follows the United States Supreme Court’s recent holding that PAGA representative action waivers in arbitration agreements are enforceable. This is a quickly changing area of law. Employers should contact their legal counsel to determine what steps they can take to minimize employee PAGA claims.
The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.
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