FOR IMMEDIATE RELEASE
June 18, 2024
Contact: Megan Gamble ▪ 916.832.1884 ▪ mgamble@calrest.org

SACRAMENTO, CA – Today, The California Restaurant Association is pleased to announce our support for legislation to reform the Private Attorney’s General Act (PAGA) after months of work with the Newsom Administration, legislative leadership, labor, and our Fix PAGA coalition.

CRA was heavily involved in the Fix PAGA executive committee with the California Chamber of Commerce, California New Car Dealers Association, Western Growers Association, and others representing the needs of our members in the conversations that led to this agreement.

“The legislation package will finally reform PAGA to reduce shakedown lawsuits our members are experiencing in record numbers, and will make sure workers are protected,” said Jot Condie President + CEO of the California Restaurant Association. “CRA is proud to have represented our members during discussions that resulted in this historic agreement, and we urge the legislature to quickly pass the reform.”

Over the years since it was enacted, PAGA has become a cash cow for trial lawyers at the expense of the workers and the businesses they have targeted.

“The agreement will make sure that workers are able to get their labor claims resolved and enable businesses to cure minor violations before having to go to court, added Matthew Sutton, Senior VP of Government Affairs + Public Policy. “The time has come to fix the broken PAGA system, and this legislative reform strikes the right balance for workers and restaurants.”

Reform Package Details:

• Employee Share of Penalty
  • Increases share employees receive from any penalty from 25% to 35%.
• Standing
  • Requires the employee (plaintiff) to personally experience the alleged violations brought in a claim.
  • Alleged violations must have occurred within the last year (presently, there is no time limitation).
• Penalty
  • Caps Penalties: For employers who proactively take steps to comply with the Labor Code before receiving a notice, the maximum penalty that can be awarded is 15 percent of the applicable penalty amount.
  • Caps Penalties: For employers who take steps to fix policies and practices after receiving a PAGA notice, the maximum penalty that can be awarded is 30 percent of the applicable penalty amount.
  • Reduces the maximum penalty where the alleged violation was brief or where it is a wage statement violation that did not cause confusion or economic harm to the employee (i.e. misspelling of company name or forgetting to add “Inc.” on the pay statement).
  • Levels the playing field for employers who pay weekly by ensuring a penalty is adjusted. Presently, such employers are penalized at twice the amount because the penalty accrues on a per-pay-period basis.
  • Addresses derivative claims.
  • Creates a new penalty ($200 per pay period) if an employer acted maliciously, fraudulently, or oppressively.
• Employer Right to Cure
  • Expands which Labor Code sections can be cured, so employees are made whole quickly.
  • Protects small employers by providing a more robust right-to-cure process through the state labor department (Labor and Workforce Development Agency) to reduce litigation and costs.
  • Provides an opportunity for early resolution in court for larger employers.
• Strengthening Enforcement Agency
  • The Administration will pursue a trailer bill to give the California Department of Industrial Relations (DIR) the ability to expedite hiring and filling vacancies to improve and expedite enforcement of employee labor claims.
• Judicial Discretion (Manageability)
  • Codifies that a court may limit both the scope of claims and evidence presented at trial.
• Injunctive Relief
  • Allows for injunctive relief.

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