The Private Attorneys General Act (PAGA) is a California labor law that enables employees to act on behalf of the state in order to enforce labor code violations. Under PAGA, employees can seek civil penalties on behalf of themselves and others for a wide range of labor law infractions, such as wage and hour violations. Intended to level the playing field by giving rank-and-file employees the ability to seek significant penalties on behalf of all the workers affected by the issues in their workplace, PAGA all too often has been a windfall for unscrupulous attorneys who just need one disgruntled employee to file a claim in order to bring a massive lawsuit, seeing penalties for every possible infraction experienced by the company’s entire workforce.
PAGA Claims in California
Recent developments have brought about notable changes in how PAGA claims are handled in California. The California Supreme Court’s ruling in July 2023, in the case of Adolph v. Uber Technologies, Inc., marked a turning point. It clarified that employees can pursue representative PAGA claims in court, even if they have previously signed arbitration agreements with their employers. This ruling comes in the wake of the U.S. Supreme Court’s ruling last summer, which held that an employee’s dispute could be compelled to arbitration instead of acting as the basis for a PAGA claim if the employee’s contract contained an applicable arbitration clause. Under this new ruling, an employee can still pursue a PAGA action on behalf of others even if their individual claim is sent to arbitration.
Key Insights on PAGA Claims
Understanding PAGA claims is essential for companies that employ Californians. Being found in violation can lead to significant penalties, reaching up to $10,000 per violation. Furthermore, it’s essential to note that employees can bring PAGA claims even if they haven’t suffered personal harm due to a labor code violation.
Employers who wish to defend against PAGA claims must demonstrate that they did not violate the Labor Code, or they can explore settlement options with the employee who filed the claim. With the appropriate documentation, it’s possible to fend off any bad faith claims, but the time and costs involved in producing the necessary records can be very burdensome, especially if your business has a large workforce or has been in business for a long time. As a result, staying informed about PAGA and mitigating its risks is critical.
Preparing for PAGA
Working with your attorney to ensure full comprehension and compliance can help you prevent and defend against PAGA claims effectively. If you are facing a PAGA action or want to take proactive steps to make sure you are prepared if one comes your way, contact Integrated General Counsel, P.C. We can help with all your business & employment legal needs and are all too familiar with PAGA problems. Call our office at (925) 399-1529 to schedule a consultation today. Your peace of mind and legal well-being are our priorities.
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