The PAGA rule has been in effect in California since 2004, but in recent years, litigation surrounding this rule has increased, and more claims have been settled in favor of employees! In 2019 alone, California collected over $88 million dollars in PAGA penalties from employers.
You deserve to be paid fairly and treated fairly by your employer. If you are an employee of any sized California company, it’s necessary for you to know what your rights are under the state’s labor laws, including under the PAGA statute, so that you can protect those rights and ensure that neither you nor your coworkers are taken advantage of!
Understanding the PAGA rule can be extremely confusing, so we wanted to take this blog post and explain it as simply as possible. Let’s look at what PAGA is, the difference between PAGA claims and other types of employment claims, what the process is for filing a PAGA claim, how doing so can be beneficial for employees, and what your next steps should be if you believe you may have a PAGA claim.
What is PAGA?
PAGA stands for “Private Attorney General Act”, and refers to a law that allows “aggrieved employees” to file a lawsuit on behalf of themselves and other employees for labor code violations and to recover civil penalties (which are otherwise only recoverable by the State of California). In essence, PAGA deputizes private citizens, giving them power to enforce the code on the state’s behalf. The idea behind the rule when it was enacted in 2004 was that state agencies didn’t have the time or resources to enforce California labor laws, so power was given to the employees in order for them to do so.
For example, imagine that one of California’s most popular fast food chain locations tells its employees that they can’t take any meal breaks when things are busy. That’s a violation of California labor laws, which state that employees must receive a certain number and length of breaks depending on their hours worked. The chain location in question has 150 employees. By the time the PAGA claim was made, they had been “stealing” breaks from these 100 employees for 50 pay periods. Under PAGA, initial violations carry a $100 penalty per employee per pay period, and subsequent violations carry a $200 penalty per employee per pay period. In this scenario, the first pay period would count as the initial violation, and the other 49 pay periods would count as the subsequent violations. If the PAGA suit is successful, the company may end up paying nearly $1.5 million in penalties. The employees would recover 25% of that amount – about $370,000, or $2,475 each – while the state government would receive the other 75% (about $1.1 million).
A few things that are important to note about PAGA claims….
A PAGA claim must be filed within one year of the alleged violation occurring – there is a statute of limitations in place. (In the above scenario, that PAGA claim would only be successful if the pay periods occurred weekly because it was filed earlier than 52 weeks).
The aggrieved employee who files the PAGA lawsuit cannot file it “individually” – it is automatically inclusive of all of the employees of the company who suffered violations.
Employees who bring PAGA claims can sue on behalf of themselves and other employees for different violations, even if they were not affected by that violation themselves, as long as they were affected by at least one violation. Taking the scenario above, if the employee who brought the lawsuit was denied meal breaks, but never worked what would be considered “overtime”, they are not limited to filing a PAGA claim for simply missed meal breaks if there were others at the company who did work unpaid overtime during the busy days. As the plaintiff, they can represent all of the company’s employees for all of the labor code violations that the employer committed.
Differences between PAGA and….
A PAGA claim is unlike other types of wage & hour lawsuits or even class action claims – it is unique, and technically considered to be a type of “qui tam” lawsuit (one filed by a private citizen on behalf of a government agency against a party who tried to obtain government money fraudulently). This means that the wronged employee filing is filing on behalf of the California Attorney General.
It’s very different from a common wage & hour or discrimination claim, where the wronged employee is only suing their employer personally, on behalf of themselves. In those types of cases, the plaintiff must have been individually victimized by the employer, the statute of limitations is generally three years (depending on the specific situation), and the plaintiff stands to recover unpaid wages and additional monetary compensation. In a PAGA claim, the employee brings a suit on behalf of other employees, may not have been personally victimized for all that is included in the claim, does not have as long to file (one year vs. three), and only stands to recover 25% of the civil penalties awarded.
A PAGA claim is closer to a class action lawsuit, but still is not the same thing. While in both situations, a single employee is bringing a lawsuit on behalf of many employees, in class action lawsuits, the plaintiff must prove that they adequately represent the entire class and that they were victimized by a common violation that the others in the class suffered. Employees bringing PAGA claims do not have to show this. In class actions, monetary compensation will also be awarded (instead of 25% of civil penalties), and the statute of limitations is longer, generally three years depending on the situation.
Benefits of filing a PAGA claim
- Gives wronged employees who signed mandatory arbitration agreements a way to seek justice through the public legal system
Many California employers attempt to protect themselves from wage & hour lawsuits or class action lawsuits by requiring their workers to sign away their right to sue. They do this by making employees agree to settle any disputes via arbitration and a private third party resolution, but this may be unfairly biased or result in less than what the employee deserves. Arbitration agreements are not enforceable when it comes to PAGA lawsuits, however! Aggrieved employees are still able to make PAGA claims even if they have agreed to arbitration.
- Gives wronged employees some level of financial damages
Even though employees may not be able to recover the level of compensation that they may via an individual lawsuit, because the government does claim 75% of the damages, they will still be able to recover some amount of civil penalties, which could be significant.
- Gives employers motivation to be fair to employees & obey the law
While an employee will not recover as much in a PAGA lawsuit as they may in an individual lawsuit, employers will likely pay more in a PAGA lawsuit. PAGA claims are a huge threat to employers’ bottom lines, and provide a level of enforcement and accountability for employers who may otherwise try to cut corners and pay their employees unfairly.
Want to learn more or file your PAGA claim? Call Southern California Attorneys, A.P.C.!
There are many benefits of filing a PAGA claim. Doing so is simpler than filing a class action lawsuit, but it’s still complicated if you don’t know the ins and outs of California law, which we do! If you suspect that you and other employees at your workplace have had fair pay withheld or have otherwise been illegally treated by your employer, contact our PAGA claim lawyers immediately to learn more about your rights and next steps. We guide you every step of the way until you see damages, and if you win, the employer will likely pay our legal fees! Call today to schedule a free, confidential consultation and get started.