PAGA Repeal Bill Withdrawn From November Ballot: What It Means for California Employees and Employers
California employment law took a rollercoaster ride in the recent election cycle when the California Employee Civil Action Law Initiative (#21-0027), a measure aimed at repealing the Private Attorneys General Act (PAGA), was introduced and then withdrawn from the November ballot. The initiative sought to fundamentally alter how labor law violations are addressed in California. For both employees and employers, the withdrawal leaves the status quo intact, but the controversy surrounding PAGA continues to be a hot-button issue. For help with employment law issues as an employer or employee in the Bay Area, contact attorney Richard Koss to speak with an experienced San Francisco employment lawyer.
What Is PAGA?
The Private Attorneys General Act (PAGA) was enacted in 2004 to empower employees to enforce California labor laws. Before PAGA, enforcement was largely dependent on state agencies such as the Labor and Workforce Development Agency (LWDA), which were often underfunded and overwhelmed with claims.
Under PAGA, employees can file lawsuits on behalf of themselves and other workers to address labor violations such as:
- Wage and hour violations
- Meal and rest break infractions
- Workplace safety issues
- Failure to provide accurate wage statements
In essence, PAGA deputizes employees to act as private attorneys general. If a PAGA claim succeeds, penalties are shared between the affected employees (25%) and the state (75%). While PAGA has provided a critical avenue for workers to address systemic violations, it has also been criticized for fostering costly litigation that can burden employers.
The California Employee Civil Action Law Initiative (#21-0027)
The California Employee Civil Action Law Initiative, commonly referred to as the PAGA repeal initiative, sought to replace PAGA with a different enforcement mechanism. If passed, the measure would have:
- Eliminated PAGA: Employees would no longer have the right to file lawsuits under PAGA for labor law violations.
- Replaced PAGA With an Administrative Enforcement System: The initiative proposed enhancing the role of the LWDA by increasing its funding and capacity to handle labor law complaints. The LWDA would be required to resolve disputes through mediation, investigation, and administrative proceedings rather than private lawsuits.
- Increased Employee Restitution: Unlike PAGA, which allocates 75% of penalties to the state, the initiative aimed to ensure that 100% of penalties recovered would go directly to employees.
- Enhanced Penalties: Civil and statutory penalties would have been doubled in the case of willful violators of the law.
- Streamlined Enforcement for Employers: By reducing litigation, the measure aimed to provide a less adversarial process for resolving disputes while maintaining accountability for labor violations.
Supporters of the initiative argued that PAGA’s elimination would curb abusive lawsuits and reduce costs for employers while preserving robust protections for workers. Critics, however, contended that administrative enforcement alone could leave labor violations inadequately addressed, given the LWDA’s historical resource constraints.
Why Was the Initiative Withdrawn?
The measure was withdrawn as a compromise among legislators and advocacy groups representing employees and similar groups representing employers. PAGA remains in place, but with several changes. For example, rather than facing a suit, the employee has time to cure the violations; if the employer makes the necessary changes, there will be no suit. Also, the employees now get a larger share of the penalties, but nowhere near 100%.
What Does This Mean for Employers and Employees?
The withdrawal of the PAGA repeal initiative ensures that employees retain the right to file PAGA lawsuits, preserving a powerful tool for enforcing labor laws. Meanwhile, employers must continue to navigate the risks associated with PAGA claims, which often involve significant penalties and litigation costs.
While PAGA remains in force, employers would be well-served to focus on proactive compliance with California labor laws, including conducting regular audits, updating workplace policies, and addressing potential violations swiftly. For employees, the status quo ensures continued access to PAGA as a means of holding employers accountable for labor violations.
The Future of PAGA
Although the repeal initiative was withdrawn, the debate over PAGA is far from over. Calls for reform persist, with ongoing discussions about how to balance the rights of workers with the operational and financial realities faced by employers. As the legal landscape evolves, both employees and employers will need to stay informed about potential legislative or regulatory changes impacting labor law enforcement in California.
Contact Attorney Richard Koss for Help With Employment Law in San Francisco
If you are a Bay Area employer or employee dealing with an investigation or lawsuit involving PAGA or other employment law matters, contact employment law attorney Richard Koss by calling 650-722-7046 on the San Francisco Peninsula or 925-757-1700 in the East Bay. Whether you’re an employer seeking to ensure compliance or an employee exploring your rights, sound legal counsel can make all the difference.
