A measure to increase remedies for workplace grievance lawsuits under consideration by the California Legislature passed the Appropriations Committee May 1.
“AB 2288 builds upon PAGA’s role as a vital tool to enforce workers’ rights,” Mr. Kalra said during the Assembly’s Judiciary Committee on April 23. “This bill would help ensure [workers] see comprehensive, meaningful relief to unlawful workplace practices.”
Passed in 2003 and effective Jan. 1, 2024, PAGA allows former or current employees to file a lawsuit on behalf of themselves, other employees, and the state against employers for violating workplace protection laws—including wage theft.
Penalties of up to $100 per employee per pay period can be assessed to employers for violations, with the fines doubling for repeat offenses—with 75 percent of penalties going to the state’s Labor and Workforce Development Agency and 25 percent to employees, though attorney’s fees are also deducted.
About 600,000 workers experience wage violations amounting to nearly $2 billion in annual losses, according to a report from the University of California Los Angeles Labor Center—with about 2 percent of the losses recovered by the Labor Commissioner.
About 91 percent of all PAGA cases are related to wage theft, including overtime violations and failure to pay for all hours worked, according to the labor center report.
A supporter of AB 2288 noted in legislative analyses that injunctive relief is needed because civil penalties allowable in existing law do not stop employers from continuing to commit workplace violations.
“This means that an aggrieved employee who is brave enough to sue their employer may win their case but returns to work only to face the very same violations they sued over. That is unacceptable,” the California Labor Federation wrote the Legislature. “AB 2288 will fix this gap in the law by allowing courts to order crooked employers to comply with the labor code.”
They also suggested the bill will benefit law-abiding businesses by removing competitive advantages companies that skirt the law gain by reducing labor costs illegally.
Opponents argued that PAGA has benefitted attorneys and the state while providing minimal awards for employees.
“PAGA is broken,” a coalition of chambers of commerce and business advocates said in committee analyses. “Unfortunately, AB 2288 would take us in the wrong direction and make a bad problem worse. Much worse.”
The groups suggest reforming PAGA to expedite workers’ claims, punish businesses that break the law, reduce frivolous lawsuits affecting companies acting in good faith, and deliver more awards to employees instead of the state and lawyers.
“A law intended to bolster labor law enforcement has been grossly manipulated by trial attorneys as a money-making scheme,” the groups said. “Lawyers are incentivized to plead as many claims as possible, regardless of their merit, to get a big settlement check.”
With cash-strapped employers affected by false PAGA claims often forced to settle to avoid litigation costs, businesses are paying the price, they said.
“This bill is moving in the wrong direction,” the business groups said. “Now is the time to fix PAGA, not expand it. Our smallest businesses, nonprofits, and public entities depend on it.”
With the bill clearing the Appropriations Committee, it will next be heard by the Assembly floor in the coming weeks.
