Private Attorneys General Act (PAGA) Amended To Address Some Excesses

On October 2, 2015, Governor Brown signed urgency legislation (Assembly Bill [AB] 1506) that immediately amends California's Labor Code Private Attorneys General Act of 2004 (PAGA)1 to address increasing civil litigation alleging technical violations of itemized wage statements (pay stubs) issued to employees. Labor Code sections 226(a)(6) and 226(a)(8) require an employer to provide its employees with wage statements containing the inclusive dates of the pay period and the name and address of the legal entity that is the employer. AB 1506 allows an employer 33 days to cure violations of these requirements before an employee may bring an action for civil penalties under PAGA. However, these violations will not be considered "cured" until the employer can show it has provided fully-compliant wage statements to each aggrieved employee for each pay period for the three-year period prior to the date of the aggrieved employee's letter to the Labor Workforce Development Agency (LWDA).

The Legislature's stated reason for requiring the amended statutes to take effect immediately (rather than the normal effective date of January 1 following a bill's passage) was "to incentivize prompt resolution of disputes over itemized wage statements under Part 13 (commencing with Section 2698) of Division 2 of the Labor Code arising from certain specified claims under Section 226 of the Labor Code."2

Purpose of PAGA

PAGA permits a current or former employee, or employees, to sue for civil penalties that, prior to the enactment of PAGA, could only be assessed and collected by the LDWA.3 One stated purpose of the law was to augment the limited enforcement capability of the LWDA by permitting employees to seek civil penalties for specified Labor Code violations through civil actions. Under PAGA, an employee, who stands in the shoes of the Labor Commissioner, can sue on behalf of him- or herself and other employees. As determined by subsequent case law, employees can either bring the claims in state court as a class action or as a representative action.4 Seventy-five percent of the penalties awarded are to be distributed to the state, and 25 percent to the aggrieved employees.

Purpose of the Amendment

While PAGA has generally been described as a law enforcement action designed to protect the public, the civil actions asserting PAGA claims are prosecuted by private individuals who may not consider themselves necessarily bound by the prosecutorial discretion that may...