Private Attorneys General Act (PAGA)

What Is the Private Attorneys General Act?

The Private Attorneys General Act (PAGA), codified at California Labor Code sections 2698-2699.8, is a unique California law that allows individual employees to act as "private attorneys general" and sue employers on behalf of the state for Labor Code violations. Enacted in 2004, PAGA was designed to supplement government enforcement of labor laws by deputizing workers to pursue civil penalties that would otherwise be sought only by the Labor Commissioner.

For California employers, PAGA represents one of the most significant litigation risks in the state. Unlike individual wage claims or even class actions, PAGA claims can generate enormous penalties based on the number of employees and pay periods affected, regardless of the actual damages suffered by any individual worker.

How PAGA Works

The Basic Framework

PAGA authorizes employees to recover civil penalties for any violation of the California Labor Code on behalf of themselves, other current and former employees, and the State of California. The penalties are divided between the state (75%) and the affected employees (25%).

Component	Description	Employer Impact
Standing	Any "aggrieved employee" can file	One employee can trigger claim for entire workforce
Scope	Covers most Labor Code violations	Nearly any violation can support PAGA penalties
Penalties	Statutory civil penalties per employee per pay period	Exposure multiplies rapidly
Distribution	75% to state, 25% to employees	Significant revenue to California
Attorney Fees	Prevailing plaintiff recovers fees	Encourages plaintiffs' attorneys to file

Penalty Structure

PAGA penalties are calculated per employee per pay period, which can quickly result in substantial exposure:

Violation Type	Initial Violation	Subsequent Violations	Calculation
Default penalty	$100 per employee per pay period	$200 per employee per pay period	Most violations without specific penalty
Wage statement violations	$50 per employee per pay period	$100 per employee per pay period	Up to $4,000 per employee
Specific statutory penalties	Varies by provision	Varies by provision	As stated in Labor Code

Example Penalty Calculation

Consider a company with 100 employees over a one-year period (26 bi-weekly pay periods) with meal break and wage statement violations:

Violation	Employees	Pay Periods	Rate	Subtotal
Meal break (initial)	100	26	$100	$260,000
Wage statement (initial)	100	26	$50	$130,000
Total Penalties				$390,000
Plus attorney fees				$100,000+

This example illustrates how even relatively minor violations can generate significant exposure when multiplied across a workforce.

PAGA Claim Requirements

Pre-Filing Requirements

Before filing a PAGA lawsuit, employees must complete an administrative exhaustion process:

Step 1: Written Notice to Employer and LWDA

Employee must serve written notice on employer
Simultaneously file notice with Labor and Workforce Development Agency (LWDA)
Notice must identify specific Labor Code sections allegedly violated
Must include facts and theories supporting each alleged violation

Step 2: Waiting Period

For most violations: 65 calendar days
For certain health and safety violations: 33 calendar days
Employer may cure certain violations during this period

Step 3: LWDA Response

LWDA may investigate the claims
If LWDA investigates, it may cite the employer or decline to act
If LWDA takes no action within the waiting period, employee may proceed

Standing Requirements

To file a PAGA claim, the employee must be an "aggrieved employee":

Requirement	Definition	Evidence Needed
Employment	Currently or formerly employed by defendant	Employment records, pay stubs
Violation	Personally suffered at least one alleged violation	Evidence of violation affecting plaintiff
Timing	Violation occurred within applicable statute of limitations	Within one year of filing

Important: Once standing is established, the employee can pursue PAGA penalties for violations affecting all other employees, even violations the plaintiff personally never experienced.

How PAGA Differs from Other Claims

PAGA vs. Individual Wage Claims

Factor	Individual Wage Claim	PAGA Claim
Recovery type	Unpaid wages, penalties	Civil penalties only (no wages)
Beneficiary	Individual employee	State (75%) and employees (25%)
Statute of limitations	3-4 years typically	1 year
Procedure	DLSE hearing or court	Court only
Scope	Individual's damages	Penalties for all affected employees

PAGA vs. Class Actions

Factor	Class Action	PAGA Claim
Certification	Must certify class	No certification required
Arbitration	Can be waived by agreement	Cannot be waived (Viking River changes)
Notice	Must notify class members	No notice required
Opt-out	Class members may opt out	No opt-out right
Recovery	Actual damages	Civil penalties
Settlement	Court approval required	LWDA review required

Employer Defenses to PAGA Claims

Cure Provisions

Certain violations can be "cured" during the waiting period to avoid PAGA liability:

Curable Violations Include:

Wage statement violations (under certain conditions)
Failure to provide itemized statements
Certain notice violations
Specific technical violations

Cure Requirements:

Must cure within 33-65 day window
Must provide written notice of cure to employee and LWDA
Must include supporting documentation
Cure must be complete for all employees

Non-Curable Violations:

Unpaid wages (minimum wage, overtime)
Meal and rest break violations
Retaliation claims
Most substantive violations

Procedural Defenses

Defense	Basis	Application
Failure to exhaust	Defective LWDA notice	Challenge specific technical defects
Standing	Plaintiff not aggrieved	Plaintiff must have suffered violation
Statute of limitations	Claims older than 1 year	One-year lookback from LWDA notice
Manageability	Trial would be unmanageable	Limited success with this defense

Viking River Cruises Decision Impact

The 2022 U.S. Supreme Court decision in Viking River Cruises v. Moriana significantly impacted PAGA claims:

What Changed:

Employers can compel arbitration of individual PAGA claims
If individual claims go to arbitration, standing for representative claims may be affected
California courts interpreting scope of remaining representative claims

Current Status:

California Supreme Court addressed in Adolph v. Uber (2023)
Employees retain standing for representative claims even after individual claims arbitrated
Employers still face representative PAGA exposure
Arbitration agreements provide some but not complete protection

PAGA Settlement Considerations

LWDA Review Requirement

All PAGA settlements must be submitted to the LWDA for review:

Settlement filed with court
LWDA has 30 days to comment
Court considers LWDA response
Court must approve as fair and reasonable

Settlement Allocation

PAGA settlements typically include multiple components:

Component	Percentage	Recipient
PAGA penalties	Varies	75% state, 25% employees
Individual claims	Varies	Individual plaintiffs
Attorney fees	25-40% typically	Plaintiffs' counsel
Administration	5-10%	Settlement administrator

Factors Affecting Settlement Value

Factor	Impact on Value
Number of employees	More employees = higher exposure
Number of pay periods	Longer period = more penalties
Number of violations	Multiple violations multiply exposure
Strength of evidence	Strong proof increases settlement
Employer financial condition	Ability to pay affects negotiations
Risk tolerance	Trial risk influences settlement

Best Practices for PAGA Prevention

Compliance Program Elements

Policy Review:

Audit all wage and hour policies annually
Ensure meal and rest break policies are compliant
Review time-keeping procedures
Verify wage statement compliance

Training:

Train supervisors on meal/rest break requirements
Educate timekeepers on proper procedures
Ensure managers understand off-the-clock work rules
Document all training conducted

Record-Keeping:

Maintain detailed time records
Document meal period waivers properly
Keep records for required retention periods
Implement attestation systems for breaks

Monitoring for PAGA Notices

Because PAGA claims begin with an LWDA notice, employers should:

Designate a recipient for LWDA notices
Monitor the LWDA website for filings (notices are public)
Respond immediately when notice received
Evaluate cure opportunities within the waiting period
Engage counsel early in the process

Responding to PAGA Notices

When you receive a PAGA notice:

Timeframe	Action
Day 1-3	Review notice, engage counsel, implement document hold
Day 4-14	Investigate allegations, assess exposure, identify affected employees
Day 15-30	Evaluate cure opportunities, calculate potential liability
Day 31-45	Implement any cures, prepare cure notice if applicable
Day 46-65	Prepare for potential litigation, consider early resolution

PAGA Litigation Trends

Increasing Filing Rates

PAGA claims have increased dramatically since enactment:

2004-2010: Gradual increase in filings
2011-2015: Significant growth in PAGA litigation
2016-2020: Record numbers of PAGA notices filed
2021-Present: Continued high volumes despite Viking River

Common PAGA Violations Alleged

Violation Type	Frequency	Typical Exposure
Meal break violations	Very High	Major exposure
Rest break violations	Very High	Major exposure
Wage statement violations	Very High	Moderate exposure
Overtime violations	High	Major exposure
Minimum wage violations	Moderate	Major exposure
Final pay timing	Moderate	Moderate exposure

Attorney Fee Awards

PAGA attorney fee awards can be substantial:

Typically 25-40% of total recovery
Based on lodestar or percentage of recovery
Enhancement multipliers possible
Significant incentive for plaintiff attorneys

The Future of PAGA

Ongoing Legislative Efforts

Various stakeholders have attempted to modify PAGA:

Employer groups: Seeking limitations on penalties and procedures
Labor advocates: Opposing weakening of enforcement tool
LWDA: Seeking increased resources for oversight
Legislature: Periodic reform proposals

Judicial Developments

Courts continue to refine PAGA jurisprudence:

Standing requirements after arbitration
Manageability limitations
Penalty reduction authority
Settlement approval standards

Practical Impact

Regardless of future changes, PAGA remains a significant concern for California employers:

Proactive compliance essential
Regular audits recommended
Prompt response to notices critical
Settlement often preferable to litigation

Understanding PAGA's unique features and risks helps California employers develop effective compliance programs and respond appropriately when PAGA notices arrive. The combination of per-employee, per-pay-period penalties, broad standing rules, and attorney fee provisions makes PAGA one of the most powerful—and dangerous—enforcement tools in California employment law.