We advised you in September 2024 about welcome modifications to an onerous statute, the Private Attorneys General Act (“PAGA”), that reduced the burden on employers. It’s time for a refresher, because these modifications (“New PAGA”) include steps that employers can take, right now, that reduce or even eliminate potential liability.

Steps employers can and should take right now.

Employers are strongly recommended to schedule a regular audit of payroll policies, practices and training.

It’s always a good idea to be in compliance: this reduces the risk that a claim will be filed in the first place. But New PAGA provides an extra incentive. It provides that if an employer has taken “all reasonable steps” to be in compliance with wage and hour rules before receiving a PAGA Notice, any penalties are reduced by 85%. “All reasonable steps” may include activities such as conducting periodic payroll audits and fixing problems uncovered, checking that written policies are lawful, and training supervisors on compliance.

Steps employers should take if they receive a PAGA Notice.

If an employer receives a PAGA notice, the employer should consult counsel immediately. New PAGA provides many opportunities to reduce or even eliminate liability, providing they act fast.

• Within 33 days: cure. New PAGA expands on an employer’s ability to “cure” violations, but the time to cure is short – only 33 days after receipt of the notice. Curing has many advantages. With paystub violations, curing prevents a lawsuit being filed. With other violations, curing plus timely remediation (see below), reduces penalties to zero.
• Within 33 days: submit cure plan to LWDA. Sometimes it’s hard to know whether a cure plan would be effective New PAGA allows small employers (under 100 employees) to submit a cure plan to the LWDA within 33 days after receipt of the notice, 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 the cure is deemed sufficient, no lawsuit can be filed.
• Within 60 days: remediation: New PAGA provides that if an employer comes into compliance within 60 days, any penalties are reduced by 70%, and if the employer has also timely cured the issue, penalties are not awarded at all.

The bottom line is – if you receive a PAGA notice, send it to counsel at once.