Historic PAGA Reform:

A Win for California Businesses

California has enacted rational reforms and important labor protections, while sensibly managing reasonable concerns from small businesses.

The newly passed legislation is an important step forward to curtail lawsuit abuse under PAGA that was hurting California businesses, our workers, and our economy. Learn more about what this historic PAGA reform means for employers.

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What is PAGA?

The Private Attorneys General Act (PAGA) allows individuals to file lawsuits seeking Labor Code violation penalties for themselves and other aggrieved employees. This resulted in a substantial increase in litigation that costs businesses billions of dollars while bringing little benefit to workers.

Key Reforms in PAGA 

On July 1, Governor Gavin Newsom signed two bills reforming aspects of PAGA, effective retroactively to June 19. The reforms include:

  • Penalty Caps: Maximum exposure could now be as little as 15% or 30% of the penalty set, depending on the steps taken by the employer.
  • Robust Right to Cure: Prior to these reforms, almost nothing under PAGA was curable.
  • Specific Mechanisms for Different Business Sizes: Tailored provisions depending on whether you're a larger or small business.
  • Changes in Standing: Plaintiffs must have personally experienced the alleged violations and file their case within one year.
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What Businesses Need to Know

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  • Potential Penalties Are Now Capped: Significant reduction if proactive steps are taken.
  • More Opportunities to Correct Violations: Employers can address issues before facing penalties.
  • Plaintiffs Must Personally Experience Violations: Reduces the scope of who can file PAGA claims.
  • Specific Exceptions for Certain Nonprofits: Narrowed applicability to particular cases.
 

Steps to Limit Exposureshutterstock_2306187017

  • Conduct Payroll Audits: Identify and address potential violations.
  • Implement Written Policies: Ensure wage and hour policies are clear and enforced.
  • Stay Updated on Wage Orders: Align company policies with industry-specific requirements.
  • Provide Training: Educate supervisors and managers on compliance.
  • Take Corrective Actions: Address issues promptly and document efforts.

Be PAGA Prepared: Resources, Training, and Expertise

CalChamber has developed resources to help you navigate these reforms:

Purchase the PAGA Wage & Hour Compliance Toolkit

We played a leading role in negotiating PAGA reform, so you can rely on CalChamber and HRCalifornia to be the top resource to help you become a PAGA Informed Employer. Our new Compliance Toolkit is designed to help your business with proactive PAGA compliance resources, and contains more than 60 digital and physical resources. Those who purchase the toolkit also receive seats to our upcoming PAGA webinars.

paga-toolkit Be PAGA Prepared by Exploring CalChamber's Compliance Toolkit

  • Special Member Pricing: $300 (Regular Price: $999.99)
  • Contains over 60 resources including wage and hour forms, policies, and posters.
  • Includes seats to our upcoming live webinars.

Purchase the Toolkit

 

Enterprise Membership

Receive the PAGA Toolkit for FREE when you purchase or upgrade to an Enterprise Membership.*

Upgrade to Enterprise


 

Join CalChamber Today and Reap the Rewards 

CalChamber assists its members in achieving peace of mind when it comes to complex California employment laws. We provide expert guidance, offer an extensive suite of comprehensive compliance products and services, and deliver dedicated support, ensuring that you have the knowledge, tools, and assistance needed to confidently navigate the intricate landscape of HR compliance.

CalChamber offers three exceptional membership levels: Online, Preferred, and Enterprise. All are packed with essential resources to empower HR professionals.

A CalChamber membership simplifies California employment laws and HR compliance obligations, saving you both time and money, while also keeping you connected with valuable resources and expert support.

Don't delay your HR compliance progress any longer; become a CalChamber member today.

Become a Member

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Operator-iconPrefer to speak with a live person? Contact us at (800) 331-8877 to get in touch with an Account Manager. Alternatively, send us an email to schedule a personalized demo of HRCalifornia.com, our members-only website. You'll discover why HR professionals bookmark and rely on this site every day.