Private Attorneys General Act Review – 2025

• Reduced Penalties for Isolated Events: If the violation resulted from an isolated, non-recurring event ( i . e ., the violation had not extended beyond the lesser of 30 days or four consecutive pay periods), the penalties are further limited to $50 per aggrieved employee per pay period. See Cal. Lab. Code § 2699(f)(2)(A)(ii). • Reduced Penalties for Wage Statement Violations: If the violation is a violation of Labor Code § 226 for non-complaint wage statements, additional limitations apply. For violations of § 226(a) (other than (a)(8) regarding the legal name or address of the employer), the penalty is $25 for each aggrieved employee per pay period if the employee could promptly and easily determine accurate information from the wage statement or if the employee would not be confused or misled about the correct identity of their employer. If the violation involves § 226(a)(8), the penalty is $25 if the employee would not be confused or misled about the correct identity of their employer or, if their employer is a farm labor contractor, the legal entity that secured the services of that employer. These limitations do not apply if the employer failed to provide a wage statement to the employee. See Lab. Code § 2699(f)(2)(A)(i). • Special Rules for Increased Penalties: In lieu of the “subsequent violation” penalty, a $200 penalty per aggrieved employee per pay period can now be levied only in certain circumstances. Specifically, this amount may only be awarded where an agency or court has determined that the employer’s policy or practice led to that same violation of the Labor Code in the previous five years or if a court determines that the employers’ conduct was malicious, fraudulent, or oppressive. See Lab. Code § 2699(f)(2)(B). • No Additional Recovery For Derivative Penalties Under Labor Code Sections 201, 202, or 203: An employee can no longer recover additional penalties for violations of Labor Code §§ 201, 202, or 203, which address when an employee must be paid upon resignation or termination, when seeking recovery for underlying wage violations. The same applies to Labor Code §§ 204 and 226, unless the violation meets heightened scienter requirements as outlined below. See Lab. Code § 2699(i). • Limited Recovery Under Labor Code §§ 204 and 226: An employee can recover additional penalties for Labor Code § 204, which addresses when an employee must be paid during their employment if that violation is willful or intentional. Additionally, an employee can recover additional penalties for violation of Labor Code § 226, which mandates that certain information be included on wage statements, if that violation is knowing, intentional, or involves a complete failure to provide a wage statement. See Lab. Code § 2699(i). • Pay Period Defined: The PAGA originally imposed monetary penalties on a per pay period basis. This unfairly penalized employers that paid employees on a weekly basis, as opposed to a biweekly basis. The reforms address this disparity, by clarifying that the recoverable penalties will be reduced by 50% where an employer’s regular pay period is weekly rather than biweekly. • Employee’s Share Of Recovery Increased : The percentage of penalties awarded to the aggrieved employees has been increased from 25% to 35%. The “Cure” For Employers’ Ills The reforms also introduce a new and more complicated “cure” process for avoiding or reducing penalties. Employers may take steps before a complaint is filed, or during litigation, to limit potential penalties. • Pre-LWDA Notice Penalty Cap: If, before receiving an LWDA notice or a request for records from the employee, an employer takes “all reasonable steps” to cure the violations alleged in the LWDA letter, awardable penalties are now capped at no more than 15% of the total available penalties. See Lab. Code § 2699(g).

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