In October 2016, California Gov. Jerry Brown signed into law AB 1506, which amended California’s Private Attorney General Act (PAGA), mostly in response to increased litigation over technical violations to wage statements.

Earlier this year, more changes to PAGA were proposed.

PAGA. Enacted in 2003, PAGA essentially deputizes the employee as an attorney general, giving him or her the right to seek civil penalties — not only for violations that he or she personally suffered, but also enables a single employee of a company to pursue a class-action suit on behalf of his or her coworkers.

Originally, omitting either the inclusive dates of the pay period or the name and address of the employer were violations that could expose some employers to liability.

The amendment. Now, employers may reissue a “fully compliant, itemized wage statement to each aggrieved employee for each pay period three-years prior to the date of the written notice” from the aggrieved employee to the Labor Workforce Development Agency. After receiving such a notice, leadership has a 33-day compliance period (starting on the day the notice was postmarked) to reissue the wage statements.

Proposed amendments. The proposed amendments to PAGA appear to provide more funding for the Labor Workforce Development Agency and Department of Industrial Relations to assist in reviewing more PAGA notices. However, it is unclear how this funding will actually reduce PAGA litigation, one of the stated goals. Some of the proposed revisions:

  1. Requiring the aggrieved employee to provide more detail in PAGA claim notices filed with the Labor Workforce Development Agency and requiring that claims for 10 or more people be verified and accompanied by a copy of the proposed complaint.
  2. Extending the time the Labor Workforce Development Agency has to review to 60 days from 30, as well as allowing the employer to request an investigation by the agency.
  3. Requiring the PAGA notices and employer responses be submitted online and accompanied by a filing fee.
  4. Extending the time to investigate accepted claims to 180 days from 120 days.
  5. Requiring that Department of Industrial Relations director receive a copy of the complaint when a PAGA case is filed.
  6. Requiring court approval of all PAGA case settlements, and requiring the Department of Industrial Relations director to be provided with notice and an opportunity to object prior to any court approval.
  7. Creating a separate procedure through which interested parties may ask the Department of Industrial Relations director for amnesty.
  8. Creating a safe harbor program to provide expedited back wage payments to employees and penalty relief to employers following the invalidation of a widespread industry practice.

While some of these changes are certainly favorable for employers, they will have little impact on decreasing exposure or liability for frivolous PAGA claims.

Serious PAGA reform is needed. While AB 1506 and the proposed changes are steps in the right direction, they still do not address the ease with which aggrieved employees can essentially file a class-action lawsuit against an employer without having to satisfy the requirements of a traditional class action lawsuit. If an employer is faced with a PAGA claim he or she should contact an attorney immediately to see if any of the stated issues can be cured, and if not, develop a strategy to respond to the claim.