Jul 1, 2024

Governor Newsom signs PAGA reform

What you need to know: Governor Newsom signed PAGA reform into law, making improvements to the system for both workers and businesses following an agreement reached between labor and business groups.

SACRAMENTO — Governor Gavin Newsom today signed legislation to reform the Private Attorneys General Act (PAGA), following efforts he led to successfully reach an agreement between business and labor groups. This legislation will strengthen worker protections, encourage employer compliance, streamline litigation processes, and avert a contentious ballot measure.

“This reform is decades in the making — and it’s a big win for both workers and businesses. It streamlines the current system, improves worker protections, and makes it easier for businesses to operate. I want to thank labor and business groups for coming together to hammer out this deal, and our legislative partners for getting these bills to my desk.”

Governor Gavin Newsom

The legislation – AB 2288 authored by Assemblymember Ash Kalra (D-San José) and SB 92 authored by Senator Tom Umberg (D-Santa Ana) – was signed into law today by the Governor after proponents of the PAGA ballot initiative withdrew their measure last week.

Here’s what this PAGA reform proposal will do:

Reform penalty structure

  • Encourages compliance with labor laws by capping penalties on employers who quickly take steps to fix policies and practices, and make workers whole, after receiving a PAGA notice, as well as on employers that act responsibly to take steps proactively to comply with the Labor Code before even receiving a PAGA notice.
  • Creates new, higher penalties on employers who act maliciously, fraudulently or oppressively in violating labor laws.
  • Ensures that more of the penalty money goes to employees by increasing the amount allocated to employees from 25% to 35%.

Reducing and streamlining litigation

  • Expands which Labor Code sections can be cured to reduce the need for litigation and make employees whole quickly.
  • Protects small employers by providing a more robust right to cure process through the Labor and Workforce Development Agency (LWDA) to reduce litigation and costs.
  • Codifies that a court may limit both the scope of claims presented at trial to ensure cases can be managed effectively.

Improving measures for injunctive relief and standing

  • Allows courts to provide injunctive relief to compel businesses to implement changes in the workplace to remedy labor law violations.
  • Requires the employee to personally experience the alleged violations brought in a claim.

Strengthening state enforcement

  • Give the Department of Industrial Relations (DIR) the ability to expedite hiring and fill vacancies to ensure effective and timely enforcement of employee labor claims.

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