• Weekly Pay Cycle Penalty Reduction: Employers who pay weekly, such as farm labor contractors, now benefit from a 50 percent reduction in penalties for violations across pay periods. This change addresses the previous penalty structure that arbitrarily and disproportionately affected employers with more frequent pay schedules. 3. Penalty Reductions Through Compliance Efforts Employers who proactively work to comply with labor laws can see their penalties reduced. Measures include: • Conducting regular payroll and compliance audits. • Maintaining clear and lawful written policies. • Training management on labor law requirements. • Correcting any identified issues promptly. Penalties can be reduced to 15 percent if “all reasonable steps” are taken before a PAGA notice is received or to 30 percent if implemented within 60 days of receiving a notice. 4. Limitations on Penalty Stacking Employees are restricted from accumulating multiple penalties for related infractions unless there is clear evidence of intentional wrongdoing by the employer. This change helps prevent exaggerated penalty claims, allowing for fairer outcomes. 5. Judicial Oversight and Case Management Courts are now empowered to manage PAGA claims more effectively by: • Adjusting penalties based on the specifics of each case. • Limiting the scope and evidence in trials. • Consolidating overlapping claims to streamline proceedings. This enhanced judicial oversight aims to prevent unwieldy litigation, granting courts and employers more control over legal processes. Opportunities for Early Resolution The reforms introduce procedures for early resolution, offering pathways to resolve potential violations before they escalate to litigation. • Small Employers (under 100 employees): Can propose resolution plans to the Labor & Workforce Development Agency (LWDA) and negotiate settlements in a structured setting. • Large Employers (over 100 employees): Can request an evaluation meeting after a PAGA lawsuit is filed to discuss the factual basis for claims and potential resolutions, reducing legal costs and addressing issues early. Encouragement to Correct Violations Employers are incentivized to rectify labor code violations promptly. This involves complying with relevant statutes, compensating employees for any owed wages, and providing necessary documentation to correct errors.
Miscellaneous Changes
• The share of PAGA settlements that go to aggrieved employees has increased from 25 percent to 35 percent, while the LWDA’s portion has decreased from 75 percent to 65 percent. • The new requirement for personal violation does not apply to existing nonprofit legal aid organizations, allowing these groups to continue filing PAGA claims on behalf of affected workers without being subject to the new standing requirement. • Courts can now issue injunctive relief under PAGA, providing plaintiffs a legal tool to stop ongoing violations and enforce compliance beyond financial penalties. Practical Strategies for Employers To leverage these reforms, employers should take “all reasonable steps” to proactively come into compliance by taking the following measures: • Regular Audits : Routinely evaluate payroll, wage statements and employment practices to ensure compliance with labor laws. • Swift Remedial Action : Address and rectify any issues promptly, communicating corrections to employees as necessary. • Active Engagement : Respond promptly to LWDA notices and requests, focusing on early resolution to avoid litigation. • Policy Updates and Training : Ensure employment policies are current and that supervisors are trained on compliance standards. Conclusion Western Growers played a significant role in the FIX PAGA coalition, representing non-profits, social justice advocates, family farmers, health care providers and businesses, which worked with Gov. Gavin Newsom and legislators in enacting this historic reform into law. PAGA reform marks a significant shift in California’s PAGA landscape, offering new opportunities for reducing litigation risks. While there is much to be proud of in terms of potentially reducing the frequency and severity of PAGA claims writ large, the new law is a compromise borne out of tough legislative negotiations and is not a panacea. While the new law will bring much needed relief for California employers, PAGA litigation in California isn’t going away anytime soon.
9 Western Grower & Shipper | www.wga.com September | October 2024
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