California businesses, both large and small, have long been grappling with the daunting specter of the Private Attorneys General Act (PAGA). This 2004 statute has allowed single employees to wield the authority of the state’s attorney general, filing lawsuits on behalf of fellow employees to recover penalties for alleged Labor Code violations. The result? A barrage of PAGA lawsuits filed with alarming frequency, often with dubious evidence.
As we stand at the crossroads of potential change in 2024, with the fate of PAGA in the hands of California voters, Worksana emerges as your ally in ensuring break compliance and shielding your business from PAGA lawsuits. With Worksana, you can watch your business run smoother, faster, and stronger.
PAGA and the Bounty Hunter Era:
The origins of PAGA are rooted in what was once colloquially known as “the Bounty Hunter law.” Employment lawyers and the media initially coined this term to describe the statute’s nature. Its impact was indeed akin to bounty hunters seeking substantial rewards, as plaintiffs’ firms filed hundreds of nearly identical PAGA lawsuits against employers.
These lawsuits accused employers of vague violations, such as not paying California employees for all hours worked, non-compliant meal and rest periods, and inaccurate wage statements. What made PAGA particularly vexing for employers was the fact that plaintiffs did not need to meet class certification criteria to represent an entire workforce. This in terrorem effect pushed many employers into settling to avoid legal fees and potentially larger awards, even in cases with scant evidence of wrongdoing.
The typical PAGA settlement revealed a stark disparity:
- 40% went to plaintiff’s counsel.
- 45% was allocated to the state Labor and Workforce Development Agency (LWDA).
- A mere 15% was left for the purportedly aggrieved employees.
For instance, in a hypothetical PAGA action involving 5,000 employees that settled for $1,000,000, the attorneys would pocket up to $400,000. In contrast, each of the 5,000 employees would receive a paltry $30 – a mere fraction of the attorneys’ earnings.
The Potential Shift in 2024: The Fair Pay and Employer Accountability Act
2024 promises a potential turning point, with California voters deciding whether to repeal PAGA and replace it with the Fair Pay and Employer Accountability Act. This new law could usher in a more streamlined process for addressing employee claims and significantly larger potential recoveries, with employees receiving 100% of any recovery, unlike the 25% awarded under PAGA.
However, the path to passing this initiative may not be straightforward. The plaintiffs’ bar, which has benefited immensely from PAGA, is likely to campaign vigorously against it, arguing that larger potential recoveries are not in employees’ best interests.
Worksana: Your PAGA Prevention Solution
In this evolving legal landscape, Worksana emerges as your steadfast partner in ensuring compliance and minimizing PAGA-related risks. Our platform empowers you to maintain impeccable records of employee breaks, thereby reducing the likelihood of PAGA lawsuits.
With Worksana, your business can operate smoothly, swiftly, and confidently, even as the legal landscape changes.
Your Shield Against PAGA Lawsuits
Whether or not PAGA undergoes reform, the challenges it has presented to California businesses are undeniable. Worksana is here to ensure your business not only survives but thrives. By mitigating the risks associated with PAGA and offering a streamlined compliance solution, Worksana is your best defense against PAGA lawsuits.
Choose Worksana and watch your business rise to new heights, irrespective of the legal challenges that may arise.
Reference: “Will 2024 Be the Year California Voters Repeal PAGA?” by Michael (Mike) S. Kun, Eipstein Becker Green, LINK, August 1, 2023.
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