FOR IMMEDIATE RELEASE
February 14, 2024
Contact: Kathy Fairbanks ▪ 916.813.1010

Sacramento – Today the Fix PAGA coalition released a groundbreaking new report by former leaders of the state’s Labor and Workforce Development Agency (LWDA), Division of Occupational Safety and Health (Cal/OSHA) and the Department of Industrial Relations (DIR), which found that employee labor claims filed under California’s lawsuit-first Private Attorney General Act (PAGA) take twice as long to resolve and provide workers only one-third of the compensation compared to employment claims reviewed by state regulators.

The report also found that non-profits, small businesses and other employers have been forced to pay nearly $10 billion in PAGA case awards since 2013, with attorneys receiving the far bigger portion of the settlements and workers consistently receiving only minimal payments. 

The report represents the most comprehensive review of available data regarding PAGA claims filed with the state and with the LWDA, the DIR and the Division of Labor Standards Enforcement (DLSE). 

Among the report’s key findings:

• Workers receive three times more when their claims are reviewed by the state vs. cases filed with a court. PAGA court case awards average $1,264 per employee vs DLSE wage claim awards averaging $3,613 per employee and DLSE Bureau of Enforcement (BOFE) awards averaging $6,438 per employee.
• PAGA cases filed with a court take nearly a year longer than claims filed with DLSE or LWDA.Workers filing claims directly with DLSE wait fewer than 10 months on average for their awards. The wait for workers averages 23 months for PAGA court case awards.
• Since 2013, employers have been forced to pay nearly $10 billion in PAGA court case awards, but because of the class-action nature of many claims and heavy lawyer commissions, workers receive only a small portion of these awards.
• DLSE offers the most effective means for workers to recover wages owed. DLSE wage claim adjudication provides the most effective and time-efficient resolution of claims by individuals. The existing PAGA fund balance could support the staffing increases and administrative changes that would be needed. Further, DLSE is no longer subject to the funding shortages cited as a justification for PAGA when it was signed into law, given the change in funding from the General Fund to workers’ compensation user funding.

“Today’s PAGA system is completely broken and does not work well for employees or employers,” said Jennifer Barrera, President and Chief Executive Officer, California Chamber of Commerce (CalChamber). “A better system would allow employee claims to be evaluated and resolved by existing state agencies, providing faster resolution and more restitution for workers, while preventing abusive lawsuits that harm both employees and employers.”  

“Our members are frequently hit with exploitative PAGA lawsuits that take from the resources available to serve Californians with intellectual and developmental disabilities,” said Barry Jardini, Executive Director, California Disability Services Association. “PAGA reform is needed to stop predatory behavior by lawyers, better protect employees, and allow organizations, like our members, to deliver on our mission and invest in the direct support workforce.” 

The Fix PAGA coalition, which includes community, disability and health advocates, small businesses and others, is promoting reforms that would eliminate the lawsuit-first, class action style approach that empowers lawyers at the expense of California workers and small businesses. The coalition favors reforms that would expand existing DLSE processes to resolve employee claims faster and provide workers with more money.  

The coalition is fully supportive and prepared to pass the already-qualified ballot measure on the November 2024 ballot. At the same time, the coalition is open to a legislative solution to avoid the need for a costly ballot campaign. 

About the Report Authors

David Lanier

In 2013, David Lanier was appointed by Governor Jerry Brown to serve as Secretary of the California Labor and Workforce Development Agency (LWDA). Lanier served until 2019. 

Prior to his appointment, Lanier served as Chief Deputy Legislative Affairs secretary to Brown and spent nearly two decades serving in leadership positions in the California Legislature. From 1999-2011, he was a Principal Consultant and Special Advisor at the Assembly Speaker’s Office of Member Services. Lanier served as Chief of Staff for Assemblymember Grace Napolitano from 1997-1998, Senior Consultant for the Joint Legislative Government Oversight Task Force from 1996-1997 and Legislative Director for Assemblymember Carole Migden from 1995-1996.

Lanier currently serves as principal at Lanier Consulting, LLC. He holds a bachelor’s degree from the University of California, Berkeley. 

Christine Baker

In 2011, Christine Baker was appointed by Governor Jerry Brown to serve as Director of Industrial Relations (DIR). She served until 2019 and was the first woman to lead the Department. Prior to being appointed, she served for two decades as Executive Director of the Department’s Commission on Health and Safety and Workers’ Compensation.

She served on the Fraud Assessment Commission, a part of the California Department of Insurance, having been appointed by Governor Brown in 2019-2023. She is currently on the board of directors of the International Workers’ Compensation Foundation and a advisor to the National Academy of Social Insurance research team.

Baker is also a principal at Baker & Welsh, LLC, a firm she co-founded with Len Welsh in 2018. She holds a master’s degree and advanced to Ph.D. candidacy at the School of Education, University of California, Berkeley, before leaving academia to take a position at DIR.  

Len Welsh

In 2003, Len Welsh was appointed by Governor Arnold Schwarzenegger to serve as Chief of the Division of Occupational Safety and Health (Cal/OSHA). Prior to being appointed, Welsh served as Counsel and Special Counsel for the division for over 12 years. 

As Chief of Cal/OSHA, he lead the adoption of a number of groundbreaking, first-in-the-nation occupational safety and health standards, including the Aerosol Transmissible Disease Standard. After leaving Cal/OSHA, he served as Acting Chief Counsel in the Department of Industrial Relations (DIR). 

He also serves as counsel to a number of labor-management partnerships operated by the Western Steel Council and Ironworkers International.

Welsh is also a principal at Baker & Welsh, LLC, a firm he co-founded with Christine Baker in 2020. He holds a master’s from the University of California, Berkeley, and a juris doctorate from University of California, Hastings College of the Law.