Understanding PAGA: California's Private Attorneys General Act

Under the Private Attorneys General Act (PAGA), California employees have long been able to file lawsuits against their employers on behalf of themselves, other employees, and the state for a wide range of labor and employment law violations.

But the law, enacted in 2004, was always controversial. On the one hand, PAGA empowered employees to act as private attorneys general to pursue penalties without having to rely on state enforcement of labor laws. On the other hand, some argued that PAGA—sometimes called the "Sue Your Boss Law"—encouraged employees to file more lawsuits rather than seek informal resolution of their claims, and ultimately benefited lawyers more than workers.

As a result of these issues, California recently made significant reforms to PAGA. These changes, signed into law in July 2024, limit workers' ability to pursue claims and recover penalties in PAGA lawsuits—but also entitle them to a greater share of any penalties they do recover. The reforms also expand employers' opportunities to reduce or eliminate their liability for violations by remedying them promptly.

Who Can Sue

To file a PAGA lawsuit, you must have personally suffered each type of labor violation you're claiming—even if you're bringing claims on behalf of other employees. This is a change from the prior law, which allowed you to bring claims on behalf of other employees even if you had not personally experienced all of those violations.

When You Can Sue

You have one year from the last alleged labor violation to file your PAGA lawsuit.

How to File a PAGA Lawsuit

To file a PAGA lawsuit, you must first file an online "PAGA Claim Notice" with the California Labor and Workforce Development Agency (LWDA) and send a certified copy to your employer. This notifies your employer and the LWDA of the labor laws you allege were violated, the employees affected, and the facts of each violation.

The LWDA has 65 days to decide whether it wants to pursue the case on its own. As discussed in more detail below, your employer may also have a chance to remedy their violations and comply with the labor laws you allege they've violated. If the LWDA doesn't pursue the case and any attempts at early settlement fail, you may file a PAGA lawsuit with the court.

How Much You Can Recover

As a general rule, you can recover $100 per worker per pay period for each PAGA violation. However, the recent reforms create exceptions to this rule in certain circumstances:

• Isolated violations: If the employer's labor violation lasts for less than 30 days or four consecutive pay periods, the maximum penalty you can recover is $50 per employee per pay period.
• Wage statement violations that cause no harm: Penalties are capped at $25 for technical wage statement violations—specifically, statements that incorrectly name the employer (as long as you weren't confused) or fail to include all the required information (as long as you can figure it out anyhow from the statement).
• Weekly pay periods: Penalties for employers who pay on a weekly basis are reduced by 50%, to bring them in line with penalties for employers who have biweekly pay periods.
• Derivative claims: If you recover penalties for an unpaid wage claim, you can't recover any additional penalties for untimely payment of wages or inaccurate wage statements based on the same underlying conduct.
• Enhanced penalties: You can recover double penalties of $200 per employee per pay period if (1) your employer's conduct was oppressive, malicious, or fraudulent, or (2) your employer is a repeat offender, meaning a court or the LWDA found that they violated the same Labor Code provision within the last five years.
• Reduced penalties for good faith compliance: As discussed in more detail below, the PAGA reforms reduce or eliminate penalties for employers who take all reasonable steps to remedy their violations and comply with the Labor Code provisions at issue.

While the changes to PAGA generally make it harder for employees to recover penalties in the first place, the reforms also allow employees to collect a larger portion of any penalties they do recover.

Under the prior law, employees were entitled to 25% of the penalties they recovered in a PAGA lawsuit, with the remaining 75% going to the state of California. The new law increases employees' share of the recovery to 35% and reduces the state's share to 65%. Employees can also seek injunctive relief under PAGA.

How Employers Can Limit Their Liability for Violations

The new version of PAGA encourages employers to take prompt action to address labor violations. It allows them to reduce or eliminate their liability by taking steps to remedy their violations. It also introduces new procedures for early settlement of PAGA cases.

Reasonable Steps to Remedy Violations and Comply With the Labor Code

PAGA allows employers to reduce or eliminate their liability depending on how quickly and thoroughly they act to resolve violations.

First, employers who correct or fix an alleged violation and take all reasonable steps to comply with the law in the future are not liable for any penalty. Reasonable steps may include things like periodic payroll audits, disseminating written policies, and training supervisors.

Second, employers who remedy an alleged violation but don't take all reasonable steps to comply with the law in the future are liable for only a $15 penalty per employee per pay period.

Third, employers who can show that, before receiving a PAGA Claim Notice, they took all reasonable steps to comply with the Labor Code provisions identified in the Notice, are only liable for 15% of the total available penalties.

Fourth, employers who can show that, within 60 days after receiving a PAGA Claim Notice, they took all reasonable steps to comply with the Labor Code provisions identified in the Notice, are only liable for 30% of the total available penalties.

Early Resolution of PAGA Lawsuits

The PAGA reforms also introduce new procedures for early resolution of PAGA cases.

LWDA Settlement Conference for Small Employers

Employers with fewer than 100 employees have the opportunity to avoid the filing of a PAGA lawsuit entirely. They can submit to the LWDA a proposal to remedy the Labor Code violations alleged in the PAGA Claim Notice. The LWDA then decides whether to hold a settlement conference between the parties. If the LWDA doesn't hold a settlement conference or the parties can't agree on a proposal to remedy the employer's violations, the employees may file a PAGA action.

Early Neutral Evaluation for Large Employers

Employers with more than 100 employees don't have the option of a pre-lawsuit conference, but they can request an early evaluation conference after the PAGA complaint has already been filed in court (as can smaller employees). This request will pause all court proceedings.

The employer can then submit to a neutral evaluator a proposal to correct the alleged violations, and the employees can respond with a settlement demand to resolve the lawsuit. If the parties are in agreement, the case results in a confidential settlement; if not, the lawsuit resumes. As discussed above, however, employers who have taken steps to comply with the law and remedy violations can have their penalties significantly reduced. In addition, employers still have the option of asking the court to approve their rejected proposal and dismiss the lawsuit.

How Courts Can Limit the Scope of Your Lawsuit

To make PAGA cases more manageable, courts can limit the evidence presented at trial or otherwise limit the scope of any PAGA claim.

Contact an Attorney

If you believe your employer has violated California labor laws that apply to you and your fellow employees, contact an experienced employment lawyer to discuss bringing a PAGA action. An attorney can evaluate the facts of your case, explain the penalties you're entitled to recover, and help you decide how best to protect your rights.