Private Attorney General Act of 2004 (PAGA)
If you own a business in California, this is information that you should know: your employees and their attorneys were given tremendous power by the State of California in 2004. The law, called the Private Attorney General Act of 2004 (PAGA), gives employees in California the right to sue their employers for any violation of the California Labor Code. In essence, this allows employees to step into the shoes of an enforcement agency like the State Division of Labor Standards Enforcement and recover civil penalties on behalf of the California Labor Workforce Development Agency (LWDA) for employees and their coworkers.
Prior to PAGA, an employee could sue for violations of the Labor Code that directly and financially affected them and his or her coworkers, like failure to pay overtime wages. However, the employee could not bring a claim if the employer’s violation of the Labor Code didn’t result in some tangible monetary damage to either the employee or coworkers.
PAGA allows for the imposition of monetary fines on employers for each violation of almost every single provision in the California Labor Code. This can result in a business owner owing substantial fines for violations of the labor code that did not result in any monetary damage to the employees and that are technical in nature and/or were done inadvertently. Protect yourself and your business. These lawsuits can be costly to defend. Every business owner should attempt to identify if there are any labor code violations and fix them quickly to avoid being sued.
For more information:
Society for Human Resource Management (Membership required)