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PAGA Law: A Growing Threat For Employers

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Given the major possible penalties, the California Private Attorneys General Act (PAGA) has always forced employers to dread their employees. All businesses should be mindful of the dangers in light of the storm of PAGA claims that employers have been dealing with. 

In this article, we understand what is PAGA and the recent developments in the claim. Keep reading to find out.

What is PAGA?

Just like every other US state, California has a comprehensive collection of rules and laws regulating the workplace. However, the state of California alone has the PAGA claim. Employees are now able to seek civil penalties for Labor Code breaches on their own as well as for other employees, owing to a law that went into force in 2004. 

Given the state government’s insufficient funding, PAGA was designed to arrest and prosecute people as legal professionals in general to execute the Labor Code. The legislation enables these employees to function as state regulators in order to get civil penalties and to be paid a portion of the sum obtained.

Legal Action Under PAGA

In order to pursue legal action under PAGA, the harmed employee must first submit a claim with the California Labor and Workforce Development Agency and provide the company with the complaint. The worker has one year after the final alleged California labor law infringement to file a PAGA case if the Labor and Development Agency does not take action within 65 days of the lodging. 

A PAGA lawsuit is perhaps a representative action in which the injured party is suing on behalf of all other injured employees. However, PAGA claims do not have to adhere to the stringent certification standards for filing a class action, in contrast to class actions. A PAGA claim by an employee may not be settled in an arbitration clause.

The default fine for the very first infringement is $100 per worker each pay period. The fine is $200 per person every pay period for a third violation. However, judges can decide how to impose these penalties.

Developments In Recent Years

The number of PAGA penalty awards and settlements has exploded recently. Some instances of expensive cases for employers are as follows:

 

  • In a well-known PAGA ruling by a federal judge in California in 2019, Walmart was sentenced to pay $102 million for breaking the rules regarding wage statements. 
  • Walmart consented to a $65 million settlement in a PAGA action over appropriate seating in 2018. 
  • Alaska Airlines was forced to pay $25 million in a 2019 PAGA lawsuit in San Diego Superior Court for violating wage calculation rules.

Examples of PAGA Claims 

A PAGA claim may be made in relation to one of three different categories of violations: 

  • Violations of the statute’s list of specified California Labor Code infractions.
  • California health and safety laws are being broken. 
  • Any other labor code infractions in California.

Multiple things can happen to cause these breaches. A PAGA claim has typically been made against companies that are accused of not paying wages in line with California’s wage and hour rules.

Nevertheless, wage and hour claims are not the only types of PAGA claims. They may include claims of discrimination, harassment, misidentifying workers, and failing to ensure their safety and health. Even COVID-19-related claims have been made. 

An employee claimed in one COVID-19-related PAGA case that she wasn’t either fairly rewarded for time spent on COVID-19 preparation or adequately compensated for business expenditures. The claim that business expenses were incurred stemmed from using a personal phone to conduct a required COVID questionnaire. The waiting period for temperature readings for COVID-19 screening before clocking in served as the foundation for the time-spent claim.

Conclusion 

Employers have always had it rough in California. PAGA is being used by plaintiffs’ attorneys to worsen the current situation. Even though there are some encouraging recent court rulings, companies in California may continue to face a significant risk from PAGA claims in the near future, and businesses in other areas may also face a significant risk.

 

We are a team of writers passionate about innovation and entrepreneur lifestyle. We are devoted to providing you the best insight into innovation trends and startups.

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