The Private Attorneys General Act of 2004 (PAGA) is a California statute that authorizes aggrieved employees to bring actions for civil penalties on behalf of themselves, other employees, and the State of California against their employers for California Labor Code violations. PAGA's purpose is not to recover damages or receive restitution, but rather to allow citizens to act as private attorneys general and enforce the Labor Code. Because PAGA suits are fundamentally law enforcement actions, aggrieved employees must notify the Labor and Workforce Development Agency (LWDA)—the state agency that enforces California labor laws—of any alleged Labor Code violations. An aggrieved employee can only file a PAGA lawsuit after the LWDA elects not to pursue its own action against the employer.
PAGA was enacted pursuant to Senate Bill 796 (SB 796) in 2003, and it went into effect on January 1, 2004. In enacting PAGA, the California Legislature declared that staffing levels for state labor law enforcement had declined over the last decade, and were unlikely to keep pace with the growth of the labor market. The Legislature determined that it was in the public interest to provide that aggrieved employees can act as private attorneys general and collect civil penalties for Labor Code violations.
PAGA lawsuits have become increasingly popular since the statute's enactment. These lawsuits have increased by over 400 percent between 2005 and 2013.
Overview
PAGA authorizes employees to recover two separate types of civil penalties. The first type is penalties for violating Labor Code sections that themselves provide for civil penalties. The second type is penalties for violating Labor Code sections that do not themselves specify penalties for their violation. For this second type of penalty, PAGA mandates that an employer's initial Labor Code violation incurs a civil penalty of $100 per aggrieved employee per pay period, and each subsequent violation incurs a civil penalty of $200 per employee per pay period. 75 percent of civil penalties recovered in a PAGA suit go to the LWDA, and the remaining 25 percent go to the "aggrieved employees" affected. Successful PAGA claimants can also recover attorneys' fees.
Before employees can initiate a lawsuit through PAGA, they must first provide written notice of their claims to the LWDA and pay a filing fee. Within 65 days, the LWDA may opt to investigate the alleged violations itself. If the employees receive notice that the LWDA does not intend to investigate, or if the employees do not receive any notice from the LWDA within 65 days, then the employees may initiate their own PAGA lawsuit. For certain violations specified in the statute, the employer has a 33-day window to cure the violation and avoid an enforcement action.
History and background
Before PAGA's enactment, the LWDA was authorized to collect civil penalties for Labor Code violations where specified. The state's Attorney General and other public prosecutors could also pursue misdemeanor charges against violators of specified provisions of the Labor Code. Additionally, for specified Labor Code sections, an employee could file a claim with the Labor Commissioner alleging a violation, and sue the employer directly for damages, reinstatement, and other relief if the Commissioner declined to bring an action. Individual employees could also sue to enjoin unlawful business acts under the Unfair Competition Law, Section 17200 of the Business and Professions Code.
In 2001, the Assembly Committee on Labor and Employment held hearings to evaluate the effectiveness of enforcement of wage and hour laws by the Department of Industrial Relations (DIR), a subdivision of the LWDA. Despite the DIR being the largest state labor law enforcement organization in the country, evidence received by the Committee indicated that public resources were not keeping pace with the rapidly growing state economy. Between 1980 and 2000, California's workforce grew by 48 percent, while the budget for California's Division of Labor Standards Enforcement (DLSE) increased only 27 percent. The budget for California's Division of Occupational Safety and Health (Cal/OSHA) decreased by 14 percent over the same period. Furthermore, DLSE and Cal/OSHA staffing levels had decreased over the past two decades.