After heavy negotiations with the legislature and business groups, a deal was reached that amends the Private Attorneys General Act (PAGA), such that a ballot measure was pulled from the November ballot.
Governor Newsom signed Assembly Bill (AB) 2288, which changed PAGA law effective July 1, 2024, and Senate Bill (SB) 92, which operates through two amendments, one which took effect on July 1, 2024, and the second taking effect on October 1, 2024. There are partial wins for employers, including increased standing requirements for plaintiffs, reduced penalties for “good actors” and an early neutral evaluation option to keep employers out of court.
AB 2288 effects the following changes, among others:
- Redefines an “aggrieved employee” to be a person that must suffer each of the violations of provisions alleged in the PAGA claim and that those violations must have occurred during the applicable limitations period, after which the claim expires.
- Amends the rules for curing PAGA violations in various ways.
- Imposes lower fines for certain “good actors,” e.g., reduced penalties where the employee can determine accurate wage information from the wage statements alone or where violations are isolated, non-recurring, and not extending beyond the lesser of 30 consecutive days or four consecutive pay periods.
- Eliminates fines altogether for certain “good actors,” e.g., no civil penalty against employers where violation was cured pursuant to Lab. Code, § 2699, subd. (g) or (h).
- Redefines increased penalties of $200 to apply where, within five years of violation, there is a finding or determination to the employer regarding unlawful policy or practices giving rise to the violation, or where employers act maliciously, fraudulently or oppressively in violating labor laws.
- Increases distribution of civil penalties for employees from 25% to 35%.
- Expanded Superior Court powers to permit awards of injunctive relief and to limit evidence at trial or otherwise limit the scope of any PAGA claim to ensure a claim is effectively tried.
SB 92 effects the following changes, among others:
- Institutes a new procedure by which employers with at least 100 employees during the notice period may request an early evaluation conference, as well as a stay of court proceedings prior to or simultaneous with the employer’s responsive pleading, or other initial appearance in state court proceedings.
- Institutes, as of October 1, 2024, a new procedure by which employers with at least 100 employees during the notice period may, within 33 days of notice, submit a confidential proposal to California’s Labor Workforce Development Agency (“LWDA”), with the cure to be completed within 45 days of any applicable conference, and with the LWDA to confirm whether the employer cured the violation within 20 days of receiving the employer’s notification.
If your business has need of clarification on PAGA rules or receives notice of a PAGA lawsuit, please contact us and we would be happy to consult with you.
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