Enacted in 2004, California’s Private Attorneys General Act (PAGA) was intended to be a more effective way to help workers resolve labor disputes. Two decades later, it’s clear that PAGA’s lawsuit-first approach has failed – it’s ineffective and inefficient for workers and unfair for thousands of small businesses.
It’s long past time for the Legislature to fix PAGA to create a better, fairer system for workers.
PAGA lawsuits have resulted in more than $10 billion in payments from employers since 2013, with a significant chunk going to lawyers and workers getting pennies on the dollar.
Lawyers know that the mere threat of a lawsuit is likely to force a settlement to avoid litigation costs – creating a system that is ripe for abuse and extortion.
The State Legislature should fix PAGA and expand on existing Labor and Workforce Development Agency (LWDA) processes, which are proven to resolve employee claims faster and provide workers with more restitution.
California should utilize the existing LWDA process to streamline resolution, minimize the need for lawsuits and help ensure swift and fair recovery for workers.
Fixes should ensure most — if not all — of the money awarded through recovery goes directly to workers.
Fixes should include increased penalties for employers who willfully violate labor laws.
The state should also encourage LWDA and other enforcement agencies to investigate industries and businesses with the most rampant labor law violations.
California should provide more information and guidance to small businesses, non-profits and others on navigating labor laws while allowing them to correct mistakes and avoid costly legal challenges.