For the past 20 years, the Private Attorneys General Act (PAGA) has been a thorn to employer’s side in California. In 2004, PAGA, a California state law, was enacted to create a private right of action for workers to file representative actions on behalf of themselves and other workers based on specific labor code violations. The purpose behind enacting such legislation was to give authority to “aggrieved employees” to enforce the law, thereby alleviating the strain on California’s Labor and Workforce Development Agency (LWDA). This private right of action empowered workers with the authority to enforce California’s numerous labor laws that the LWDA purportedly did not have resources to pursue. Successful PAGA litigants recover 25 percent of monetary penalties for state labor law violations, while the remaining 75 percent of penalties go to the LWDA. The statute also allows plaintiffs’ lawyers to recover attorneys’ fees if they prevail on a PAGA lawsuit.   

Several legislative changes to PAGA have been attempted with varying degrees of success. Given the lack of meaningful change at the legislative level, a ballot measure, entitled the California Fair Pay and Employer Accountability Act of 2024, was drafted and proposed. The California Fair Pay and Employer Accountability Act of 2024 has qualified to be on the ballot in the November 2024 general election. If it is successful, the California Fair Pay and Employer Accountability Act of 2024 would repeal PAGA and replace it with new legislation that would double the statutory and civil penalties for willful state labor law violations. The proposed changes in the Act would shift the responsibility back to the LWDA, making it the exclusive authority for enforcing Labor Code violations under PAGA. Moreover, it would change PAGA such that employees would receive 100 percent of recovered penalties thereunder. The California Fair Pay and Employer Accountability Act of 2024 states that it hopes to find a solution that is better and fairer at maintaining workers’ rights while alleviating the burden of PAGA claims on California employers. 

After two decades, the fate of PAGA now lies in the hands of California voters through the California Fair Pay and Employer Accountability Act of 2024, which will be on the ballot in November’s general election. Reed Smith will continue to monitor developments regarding the fate of PAGA once the November general election takes place. If you have any questions regarding any wage and hour laws, please contact your California Reed Smith attorneys or the authors of this article.