This summer, California passed significant and much-needed legislation reforming the Private Attorneys General Act (PAGA), which permits individual employees to sue employers on behalf of themselves, other employees, and the State of California to recover civil penalties for California Labor Code violations.  If you are passionate about the intricacies of PAGA and wish to spend some quality time on a deep dive into what these changes mean for employers, feel free to check out our previous writing on the subject here.

Additionally, the California Labor & Workforce Development Agency (LWDA) recently published Frequently Asked Questions (FAQ) regarding PAGA, providing an overview of the complicated law and the recent amendments.  The FAQ covers PAGA basics and provides guidance to employers on the new procedures introduced by the recent amendments.

The LWDA’s FAQ answers important questions employers might have, such as: who can bring a PAGA lawsuit? Notably, for PAGA notices filed on or after June 19, 2024, a PAGA lawsuit can only be filed by a current or former employee who has experienced each of the alleged violations of labor laws.  Prior to the PAGA reforms, an employee only needed to have experienced at least one of the alleged violations in order to file a PAGA lawsuit.

One particularly important result of the PAGA reforms concerns the applicable statute of limitations for the personal Labor Code violation that a plaintiff must experience to bring a PAGA claim.  Previously, plaintiffs have argued that there is no time limit on when they could have experienced a Labor Code violation to bring a PAGA claim.  Now, the amended law makes it clear that plaintiffs have standing to bring a PAGA action only for alleged violations committed within the previous one-year period.

With the PAGA reforms in place, California also enacted a law extending the exemption from PAGA for certain employees in the construction industry. Employees in the construction industry who are covered by a collective bargaining agreement (CBA) meeting certain requirements are unable to bring a lawsuit under PAGA.  That exemption, set to expire January 1, 2025, has been extended to January 1, 2038 under Assembly Bill 1034.

For the exemption to apply, the CBA must expressly provide for: the wages, hours of work, and working conditions of employees; premium wage rates for overtime; and for employees to receive regular hourly pay at least 30% above the state minimum wage.  In addition, the CBA must prohibit all of the violations of the labor code that are redressable under PAGA and provide for a grievance and binding arbitration process to redress violations.

In light of the changes resulting from the recent reforms to PAGA, employers are reminded to ensure their policies and practices are compliant with the Labor Code and are advised to act quickly in response to receiving a PAGA notice.