PAGA Defense | For Employers

California boasts a distinctive feature in its legal landscape: the Private Attorneys General Act (PAGA). This statute empowers individual employees to initiate representative lawsuits against their employers. In doing so, employees act as "private attorneys general," seeking the imposition of civil penalties not solely for themselves, but also for the benefit of all other allegedly aggrieved employees within the same workplace. Notably, these lawsuits bypass the formal procedural requirements typically associated with traditional class actions. This facet of PAGA has generated significant debate and legal interpretation, with ongoing discussions regarding its implications for both employee remedies and employer compliance. We must emphasize the substantial potential financial liability for employers facing PAGA claims.

Due to the per-violation, per-employee, per-pay period structure of the penalties, a single lawsuit can swiftly escalate into hundreds of thousands, potentially even millions of dollars in potential exposure. Furthermore, the allocation of recovered civil penalties presents a unique feature: only 25% is designated for the purportedly aggrieved employees, while the remaining 75% is directed to the State of California. This distribution scheme, coupled with the additional potential for attorneys' fees on top of any penalty recovery, paints a sobering picture for employers navigating PAGA claims.

A plaintiff’s attorney can then collect their fees on top of the penalty recovery. The penalties can be disastrous for any small business.

Curing PAGA Violations: A Precarious Opportunity for Mitigation

The Private Attorneys General Act (PAGA) presents employers with a tenuous, yet potentially advantageous avenue to mitigate potential liability. Under certain circumstances, the statute allows employers to rectify specific violations before a lawsuit is filed. This process, known as curing, offers a narrow window to potentially reduce their exposure to civil penalties. However, it is crucial to recognize the strict requirements and limited scope associated with curing, as well as the importance of seeking competent legal counsel to navigate this complex process effectively.