The effort to stop frivolous lawsuits against employers by replacing the state’s Private Attorneys General Act (PAGA) continues to advance.
The campaign supporting the California Fair Pay and Employer Accountability Act has gathered more than 60% of the signatures needed to place the PAGA reform initiative on the ballot this November.
The California Chamber of Commerce strongly supports the initiative and encourages members to learn more about how it will help both workers and businesses.
Supporters may make monetary contributions through the initiative website at stoptheshakedown.com.
View Interview
CalChamber President and CEO Jennifer Barrera recently outlined the benefits of the PAGA reform initiative in an interview with KGET News.
To watch the interview, visit this link.
Reforms Needed
The California Fair Pay and Employer Accountability Act would replace PAGA with increased enforcement mechanisms in the hands of the Labor and Workforce Development Agency (LWDA) so that workers recover wages faster and employers are no longer targeted by frivolous private litigation.
PAGA was enacted in 2004 to help the LWDA enforce California’s labor laws. It allows employees to sue for any Labor Code violation as if they were the state. Because it deputizes private attorneys to file lawsuits on behalf of those employees, it has been abused.
Frivolous lawsuits brought under PAGA have cost California businesses billions of dollars, all while workers are left waiting years to receive very little and attorneys walk away with millions.
Attorneys can leverage PAGA’s penalties to get big settlements even if the claims have no merit. The employer ends up paying a hefty sum with much of the money going to the attorneys and very little going to workers or the state.
PAGA lawsuits have increased more than 1,000% since the law took effect in 2004. By 2016 and every year since, the LWDA has received between 4,600 to 6,000 PAGA notices. Employers have paid out billions of dollars in PAGA penalties since 2004.
PAGA Benefits Trial Attorneys
A review of PAGA data demonstrates that workers get about five times less in a PAGA case than they would if they had filed a claim with the LWDA. They also wait almost twice as long to get the money they are owed.
Meanwhile, PAGA attorneys walk away with an average of $372,000 per case.
PAGA Court Case
• Average Award Paid by Employer: $1,118,777.38.
• Average Award Received by Employees: $1,256.38.
• Average Case Duration: 526 days.
LWDA-Decided Cases
• Average Award Paid by Employer: $789,936.
• Average Award Received by Employees: $5,941.
• Average Case Duration: 343 Days.
Initiative Reforms
The California Fair Pay and Employer Accountability Act would solve PAGA problems by:
• Replacing PAGA with alternative enforcement mechanisms through the state;
• Ensuring 100% of penalties go to workers;
• Speeding up recovery of wages and penalties for workers;
• Doubling penalties where employers willfully violate the law; and
• Creating a consultation unit the employer can contact about interpreting labor laws.