California’s landmark 2024 reforms to the Private Attorneys General Act (PAGA) are already showing positive results for employers and employees, according to a new report released by four of the state’s leading employment law firms.
Read the report here.
Eighteen months after implementation of the reforms, employment law experts report faster settlements, more narrowly focused lawsuits, and greater collaboration between employers and employees.
Early Successes
Key early successes from PAGA reforms include:
• Employers Doubling Down on Compliance Efforts. Employers have ramped up their compliance efforts, conducting audits more frequently while training managers and updating policies proactively.
• Narrower Standing Reduces Frivolous Lawsuits. Employers and defense lawyers report they are now routinely knocking out claims early by proving the plaintiff didn’t experience certain violations, dramatically shrinking exposure. Claims are resolved faster and for less money because legal disputes are narrower and more manageable.
• More Money & Faster Resolution for Employees. PAGA reforms increased the employee share of penalties from 25% to 35%, with the state receiving 65%. The early resolution process through the state’s Labor and Workforce Development Agency (LWDA) also limits the need for extended and costly litigation.
• Reduced Penalties for Employers. Reduced penalties now balance fairness with enforcement. Defense firms report significantly reduced penalties on employers because of the PAGA reforms.
• One-Year Limitations Period. PAGA reforms clarified standing law that a plaintiff must have experienced a violation within the past year to bring a claim.
• Ability to Limit the Scope of Claims and Evidence to Ensure Manageability. Courts now have explicit authority to limit the evidence to be presented at trial or otherwise limit the scope of a PAGA claim to ensure cases remain manageable for trial.
With early data already showing reduced litigation and stronger compliance, California’s PAGA reforms are delivering on the promise to improve the system for both employers and employees.