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In 2024, The Private Attorneys General Act (PAGA) was reformed in several aspects, including:
The amended PAGA rules apply to PAGA claims brought on or after June 19, 2024. Existing claims are still subject to the original PAGA rules.
Under the PAGA, an individual aggrieved employee, acting on their own behalf and/or on behalf of other current and former employees, can bring a civil action to enforce provisions of the Labor Code if the government has not done so.1 PAGA lawsuits are filed on behalf of the state of California, meaning employees pursue penalties as if they were a state agency. Lawsuits for most violations of posting, notice, agency reporting or filing requirements are excluded from private enforcement, except those requirements as they relate to payroll or workplace injury reporting.
An aggrieved employee can recover the applicable civil penalty on behalf of themself and other current or former employees against whom one or more of the alleged violations was committed. Claims under the workers’ compensation program are excluded.
Prior to filing a lawsuit, certain procedural steps must be followed for three broad categories of alleged Labor Code violations. These steps are designed to permit voluntary, early resolution of the employer violation with or without the intervention of a state agency.2 In all three categories, the employee must first notify you and the California Labor and Workforce Development Agency (LWDA) of the alleged violation (PAGA notice). The PAGA notice must include the specific code provisions allegedly violated and the facts and arguments supporting the violation. All time limits run from the postmark date of this notice.
In recent years, courts have issued employee-friendly decisions in PAGA lawsuits that have made it easier for employees to sue under the PAGA.
A court held that an employee affected by at least one Labor Code violation can sue under the PAGA to recover penalties for unrelated Labor Code violations by the same employer — even for those violations that did not affect the employee.3 In other words, the court concluded that under the PAGA, an aggrieved employee can bring a lawsuit for any Labor Code violation, as long as that employee has suffered a single Labor Code violation of their own. This issue was addressed under the recent PAGA reform measures, which amended the law so that now, employees can bring claims on behalf of other employees and former employees only to the extent that they, too, experienced the same labor code violation.4
In another case, a court held that a PAGA representative claim for failure to provide accurate wage statements under Labor Code section 226(a) does not require proof of injury or a knowing and intentional violation, even though both elements are required when bringing the same claim on an individual, non-PAGA basis.5
The California Supreme Court ruled that employees that settle and dismiss individual Labor Code violation claims against employers can still retain standing to pursue a claim under the PAGA.6 The court reiterated that PAGA claims are legally distinct from other civil lawsuits. They’re a dispute between the state and the employer, not the employees and employer. Moreover, the ability to bring a PAGA claim is defined in terms of violations, not injury.
California’s Fourth Appellate District then used the Supreme Court’s ruling to expand the reach of representative actions under the PAGA as, specifically, an employee with an outdated individual claim may still file a representative claim — on behalf of other purportedly aggrieved employees — under the PAGA.7 By limiting an employer’s ability to defend PAGA claims based upon statute of limitations grounds, any former employee can be encouraged to seek PAGA penalties — regardless of when and how long they were employed. Under this analysis, it’s conceivable that an employee whose claims expired 10 years earlier could still bring a PAGA claim because at one time, the employee was an aggrieved employee under the PAGA. The recent PAGA reform measures addressed this case as well, revising the law so that PAGA claims are locked into a one-year statute of limitation.8
The PAGA creates three broad types (or categories) of Labor Code violations:
Each category of violation has certain procedural requirements. Additionally, the third type/category allows for the possibility of curing the violation.
Category one specifies approximately 140 Labor Code sections that relate to:
An employee who believes that their rights under one of these sections have been violated must notify you and the Labor and Workforce Development Agency. Within 60 calendar days of the notice’s postmark date, the agency must notify you and the employee if it does not intend to investigate the alleged violation.
The employee can file a lawsuit if:
Category two includes alleged violations of Labor Code Division 5, which regulates occupational health and safety, except sections 6310, 6311 and 6399.7, which are included in the first category. Before filing a lawsuit, an employee must notify you, Cal/OSHA and the Labor and Workforce Development Agency.
Cal/OSHA must then inspect or investigate as required by law and, if it issues a citation, no lawsuit can be filed. Cal/OSHA must notify you and the employee within 14 calendar days of certifying that the violation was corrected.
If Cal/OSHA does not issue a citation within its inspection deadline, the employee can challenge that decision in court. If the court directs Cal/OSHA to issue a citation, the employee cannot file another lawsuit. If Cal/OSHA fails to inspect or investigate, the employee can proceed as with other third category claims.
No private lawsuit can be filed if the employer and Cal/OSHA are already parties to an agreement for long-term abatement of conditions, or if they have previously entered into a consultation agreement about a condition at a particular worksite. However, a consultation agreement entered into after receiving an employee’s notice does not prevent this process from continuing.
Category three covers all other alleged Labor Code violations and the failure of Cal/OSHA to inspect or investigate, in which case the following conditions apply:
Prior to the 2024 PAGA reform measures, there were very few labor code violations that could be cured. The amendments, however, allow employers to potentially cure more violations, including:
Any employee who prevails in any action is entitled to an award of reasonable attorneys’ fees and costs. The employee can also pursue other remedies available under state or federal law either separately or concurrently with this action.
The 2024 PAGA amendments significantly changed the penalty structure. Previously, the default penalty was $100 for an initial violation and $200 for a subsequent violation. The recent changes did away with the automatic subsequent violation increase. However, courts can still award the $200 penalty if certain conditions are met. The PAGA reforms also reduced penalties below the $100 default amount for certain violations.
Currently, the various potential penalties available under the PAGA are as follows:
A court must review and approve penalties in connection with any settlement agreement. Courts have discretion to award lesser penalties to avoid unjust results.
Civil penalties recovered by aggrieved employees are divided, giving 65 percent to the Labor and Workforce Development Agency and 35 percent to the aggrieved employees. Prior to the 2024 PAGA amendments, 75 percent went to the state and 25 percent went to the employees. Where the claim is against an organization with no employees, the penalty is paid to the Labor and Workforce Development Agency.
While the 2024 PAGA amendments are all important, one of the most notable — and actionable for employers — is the reform to PAGA’s penalty provisions. On top of restructuring the default penalties described above, the PAGA amendments provide penalty caps for employers that take “all reasonable steps” to comply with the law. If an employer has proactively taken all reasonable steps to comply with the law before receiving a PAGA notice or an employee records request (e.g., payroll or personnel records requests), then the maximum civil penalty is capped at 15 percent of the penalty sought under a PAGA action.11 Additionally, penalties are capped at 30 percent for employers who take all reasonable steps to prospectively comply after receiving a PAGA notice.
The law states that "all reasonable steps" may include, but are not limited to:
Due to the complicated nature of California’s wage and hour laws, and the potential consequences of noncompliance, the actions listed above are longtime “best practices” in an employer’s ongoing efforts to comply with the law. Under the PAGA reform measures, however, it is critically important for employers to engage in these steps now, prior to receiving a records request or PAGA notice - even if they think their policies and practices are already in compliance with the law.
The law specifies that whether an employer’s conduct was reasonable and eligible for penalty reduction will be evaluated based on the totality of the circumstances, taking into consideration the size and resources available to the employer and the nature, severity and duration of the alleged violations.
To assist employers in meeting their wage and hour requirements and take the “reasonable steps” identified above, CalChamber created the PAGA Wage and Hour Compliance Toolkit, which contains access to wage and hour webinars, 16 wage and hour policies that employers can customize and disseminate to their supervisors and employees, and more. To learn more, visit the CalChamber Store. CalChamber members also have access to 40+ wage and hour forms and our Wage and Hour Guide.
In 2022, the U.S. Supreme has ruled that individual claims under the Private Attorneys General Act (PAGA) can be compelled to arbitration if the employee signed a valid arbitration agreement to that effect.13
The California Supreme Court, however, ruled in 2023 that even when an employee’s individual PAGA claims are subject to arbitration, the employee maintains standing to pursue representative (i.e., non-individual) PAGA claims in court, departing from the U.S. Supreme Court’s ruling.14 The California Supreme Court’s ruling severely limited the impact of the U.S. Supreme Court’s decision. The California Supreme Court noted that an employee’s standing to pursue non-individual claims may still be challenged. For example, if the arbitrator determines that the employee is not an “aggrieved employee” under PAGA and that determination is upheld in court, then the employee would lose standing to pursue the representative claims in court.
However, some PAGA plaintiffs attempted to avoid arbitration entirely by filing PAGA actions that purported to include only representative claims, sometimes referred to as “headless” PAGA lawsuits. A California Court of Appeal recently rejected this type of claim, concluding that “every PAGA action necessarily includes an individual PAGA claim.”15 Shortly thereafter, another court took a different approach and affirmed the denial of a motion to compel arbitration of a headless PAGA action, finding that the case could not be compelled to arbitration because the plaintiff’s complaint did not specifically plead an individual PAGA claim.16
Until a California Supreme Court decision, given the differing approaches by two courts, employers’ strategies for compelling arbitration and/or challenging the complaint in headless PAGA actions may vary depending on the court in which the case is being heard.
Additionally, California law contains limited statutory exceptions to PAGA claims.
Construction industry employees may be prohibited from pursuing a PAGA claim if the workers are covered by a collective bargaining agreement (CBA). To qualify for the exemption, the CBA must include a grievance and binding arbitration procedure to address potential Labor Code violations. Specifically, the CBA must:
This exception was scheduled to sunset in 2028, but recent legislation extended it until January 1, 2038.17
PAGA also doesn’t apply to janitorial employees represented by a labor organization that represented janitors before January 1, 2021 with respect to work performed under a collective bargaining agreement that provides for the wages, hours of work, and working conditions of employees, provides premium wage rates for all overtime hours worked, and does all of the following:
This exception remains in effect until July 1, 2028.
1. Lab. Code secs. 2698-2699
2. Lab. Code secs. 2699.3, 2699.5
3. Huff v. Securitas Security Services USA, Inc., 23 Cal.App.5th 745 (2018)
4. Lab. Code 2699(c)(1)
5. Raines v. Coastal Pacific Food Distributors, Inc., 23 Cal.App.5th 667 (2018)
6. Kim v. Reins International California, Inc., 9 Cal.5th 73 (2020)
7. Johnson v. Maxim Healthcare Services, 281 Cal.Rptr.3d 478 (July 21, 2021)
8. Lab. Code 2699(c)(1)
9. Williams v. Alacrity Solutions Group, LLC, 110 Cal.App.5th 932 (2025)
10. Lab. Code sec. 2699
11. Lab. Code sec. 2699(g)(1)
12. Lab. Code sec. 2699(g)(2)
13. Viking River Cruises v. Moriana, 596 U.S. 1906 (2022)
14. Adolph v. Uber Technologies, Inc., Cal.5th 1104 (2023)
15. Leeper v. Shipt, Inc. (B339670, December 31, 2024)
16. Rodriguez v. Packers Sanitation Services LTD., LLC. (D083400, February 26, 2025)
17. Lab. Code sec. 2699.6