PAGA Amendments Not the Solution Employers Need
September 13 2016
By: Jessica Shoendeist
California employers hoped for significant changes following Governor Brown’s budget proposal that called for the Labor and Workforce Development Agency (LWDA) to have more oversight of claims made under the Private Attorneys General Act of 2004 (PAGA). The budget proposal noted that the departments tasked with investigation and enforcement of the Labor Code has never “had the staffing and resources to effectively review notices, or choose cases for further investigation.” This is especially true given that the notices are currently being reviewed by a single employee.
Employers in California were optimistic that Governor Brown’s proposal to establish a PAGA unit and hire new employee would reduce unnecessary litigation and lower the cost of doing business. Although such investigations may still lead to claims and the payment of civil penalties, employers in California were encouraged by the belief that the LWDA would refuse to impose frivolous actions. Nor would employers be required to pay for attorneys’ fees anytime civil penalties are due. Unfortunately, Governor Brown’s original proposals were not enacted. The amendments to PAGA that were enacted do not alleviate most employers concerns with PAGA. The amendments focus on the procedure rather than substance. The amendments became effective June 27, 2016. The amendments provide five primary changes.