California employers are required to abide by several labor laws. For example, employers in California must pay employees at least the applicable minimum wage rate. Also, California law requires that non-exempt employees who work over eight hours a day or 40 hours a week be paid overtime. When California employers violate employees’ wage and hour rights, affected employees have several ways of defending themselves. One component of wage and hour defense in California is the Private Attorneys General Act (PAGA). It is crucial that employers understand what PAGA is and why it is so dangerous and costly for them. It is also vital for employers to know how to mitigate the risk of PAGA claims and how to navigate PAGA claims.
The Private Attorneys General Act gives workers the power to pursue labor code violation claims against an employer on behalf of themselves and other employees. PAGA deputizes private individuals to act as “private attorneys general.” PAGA allows current or former workers to file claims on behalf of the California Attorney General. A worker who files a PAGA claim can proceed with the claim as if they were fulfilling the role of a state agency mandated to protect employee rights.
The Private Attorneys General Act allows “aggrieved employees” to file a PAGA claim on their behalf and that of other employees. An aggrieved employee is a worker who has suffered from one of the company’s labor violations.
Several aspects of PAGA make it particularly dangerous and costly for employers. First, when it comes to PAGA claims, a current or former employee can recover damages for all of the company’s labor violations, not just the ones that affected them.
Second, even if an employee has signed an arbitration agreement, they can still file a lawsuit on behalf of a group of workers.
Third, PAGA penalties are imposed per pay period, per employee. If an employer is found to have violated a labor law, they are required to pay $100 per employee per pay period. Every subsequent violation requires an employer to pay $200 per pay period per employee. So, suppose you have 26 pay periods. In such a case, you will be required to pay $5,100 for just one employee.
Additionally, PAGA requires losing employers to pay the employee’s attorney fees. The threat of paying attorney fees causes many employers to settle PAGA claims quickly.
You can take several steps as an employer to mitigate the risk of PAGA claims. They include the following;
If faced with a PAGA claim, the following are some of the steps to take;
If you have questions on PAGA or need legal help, contact a skilled Silicon Valley employment attorney at SAC Attorneys LLP.