Reducing PAGA Liability Under Recent PAGA Reforms

The California Legislature passed reforms to California’s onerous Private Attorneys General Act (“PAGA”) in 2024, which is good news for California employers. The PAGA reforms revamped the law’s penalty structure and provide employers with an opportunity to remediate possible violations to reduce potential liability for penalties.

Previously, PAGA penalties were set at $100 for each initial violation per pay period and $200 for subsequent violations. Under the new reforms, the default penalty amount is now $100 per pay period, which can be increased or reduced depending on the circumstances of the violations.  

For employers who take “all reasonable steps” to come into compliance with applicable wage-and-hour rules within 60 days after receiving a PAGA notice, penalties are generally capped at $30 per violation. For employers who take “all reasonable steps” before receiving a PAGA notice, penalties are reduced even further to $15. Examples of what employers can do to take “all reasonable steps” to come into compliance include conducting audits of payroll records, taking corrective action to remedy violations, training staff and management on wage-and-hour policies and practices, and implementing legally compliant written policies.

Therefore, it is essential for employers to take immediate action upon receiving a PAGA notice (and even before) to substantially limit their exposure to PAGA liability. Please contact Edgar Legal Group for assistance in navigating this process.