Labor and Employment

What is PAGA?

California’s labor law enforcement agencies, including the Labor and Workforce Development Agency (“LWDA”) also known as the “Labor Board” has the authority to investigate whether employers violate the California Labor Code, and assess and collect civil penalties for any such violations.  However, due to purported budget cuts and cited lack of state resources to prosecute such actions, in 2004, the Legislature enacted the Private Attorneys General Act of 2004 (PAGA), Lab. Code, § 2698 et seq., to authorize an employee to bring an action for civil penalties on behalf of the state against his or her employer for Labor Code violations committed against the employee and fellow employees, with 75% of the proceeds of that litigation going to the state, and 25% to the employees.  A PAGA plaintiff therefore steps into the shoes of an attorney general to prosecute alleged Labor Code violations for civil penalties, on behalf of the state.  PAGA penalties can be astronomical.  Pursuant to PAGA, default civil penalties are $100 “for each aggrieved employee per pay period for the initial violation,” and $200 per aggrieved employer, per pay period, per “each subsequent violation.”

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In 2018, in response to the #MeToo movement, California enacted Senate Bill 820 which added section 1001 to the California Code of Civil Procedure and prohibited employers from including provisions into settlement agreements that prevent the disclosure of factual information relating to claims of sexual assault, sexual harassment, failure to prevent harassment, harassment in a professional relationship, discrimination based on sex, or retaliation that had been made in connection with a civil lawsuit or administrative action.  Senate Bill 820 took effect on January 1, 2019.  Notably, it applied only to claims based on sex and not other forms of harassment or discrimination nor did it apply to settlement or severance agreements signed before an employee filed a lawsuit.

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On September 27, 2021, Governor Newsom signed SB 606, which creates two new categories of Cal/OSHA violations: “enterprise-wide” violations and “egregious” violations. The new law expands Cal/OSHA’s citation authority and could have the effect of greatly increasing the fines employers (especially those large employers with multiple worksites) might be subject to. The new law will go into effect on January 1, 2022.

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As many will recall, the California Family Rights Act (“CFRA”) was significantly expanded last year. The CFRA requires most employers grant eligible employees up to 12 weeks of job-protected time off. On September 27, 2021, Governor Newsom signed AB 1033, which provides that leave must now be granted to eligible employees for the purposes of providing care to a parent-in-law with a serious medical condition.

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On September 27, 2021, Governor Newsom signed AB 1003 into law. AB 1003 adds a new type of grand theft to Penal Code section 487m for an employer’s intentional theft of wages in an amount greater than $950 (from any one employee), or $2,350 (from two or more employees) in a 12-month period. Violations of this new law also carry a potential prison sentence of up to three years. AB 1003 further allows for the recovery of wages through a civil action.

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It’s October, and that means the 2020-2021 California legislative session has officially ended, and Governor Newsom has signed many new bills into law. As always, several of these new laws affect employers across the state. Over the next several days/weeks, our employment group will ensure that employers are informed and ready to implement the new laws as 2022 approaches.

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