New PAGA Amendments Intended To Help California Employers

With the stated purpose of reducing “unnecessary litigation” and lowering the cost for employers doing business in California, Governor Jerry Brown, on June 27, 2016, signed into law amendments to California's Private Attorneys General Act (“PAGA”). The PAGA has been a thorn in the side of California employers since it was enacted because it grants employees the authority to sue for Labor Code violations on behalf of themselves and other employees as a representative of the California Labor and Workforce Development Agency (“LWDA”). Plaintiffs’ lawyers have seized on this opportunity to file numerous lawsuits against California employers over the last few years, often for minor or technical violations, seeking to recover not only available penalties but their fees and costs as well.

The new amendments, which are effective July 1, 2016, aim to give the LWDA more oversight over PAGA claims. They provide as follows:

• The LWDA now has 60 days to review PAGA notices. (Formerly it was 30 days.)
• Employee notices to the LWDA must be submitted online along with a $75 fee.
• Employers’ cure notices to the LWDA must be submitted online.
• A PAGA plaintiff cannot commence a civil action until 65 days after sending notice of claimed violations to the LWDA. (Formerly it was 33 days.)
• The LWDA has 65 days to notify the plaintiff and employer of its intent to investigate. (Formerly it was 33 days.)
• For cases filed on or after July 1, 2016, the LWDA may extend its deadline to issue citations to up to 180 days, and the LWDA must be served with a copy of any PAGA complaint filed in court.
• The LWDA must be provided with a proposed PAGA settlement at the same time as the settlement is submitted to a court for the court’s required approval.
• The LWDA must be provided with any court order that approves or denies a settlement of PAGA claims.

It remains to be seen how the LWDA’s increased role pursuant to these amendments will impact California employers and PAGA litigation. Some of the amendments, such as the increased cure period, provide obvious benefits to employers, while others, such as the $75 filing fee for LWDA notices, likely won’t have much effect. For other amendments, such as the ones that give the LWDA a role in the settlement of PAGA claims, the impact likely won’t be clear for some time. Ultimately, whether Governor Brown's stated objectives of reducing litigation and decreasing employers’ costs of doing business will become reality is unknown, but at the very least, the amendments reflect a recognition that PAGA claims and litigation need to be reined in.