New PAGA Rules Take Effect July 1, 2016

Governor Jerry Brown’s budget for 2016-17 contains several significant amendments to the procedural requirements of the Private Attorneys General Act, or PAGA.  These amendments apply to PAGA cases Gear-and-Gavel_dark-bluefiled on or after July 1, 2016.  They are limited to cases alleging violations of the California Labor Code provisions listed in Labor Code section 2699.5.

The amendments fall into four large categories:  (1) the cost and procedure for filing a PAGA action; (2) the timing of PAGA actions; (3) what information and documents must be provided to the Labor and Workforce Development Agency, or LWDA; and (4) the procedure that an employer must follow to cure PAGA violations.  Each amendment goes into effect on July 1, 2016, and does not affect PAGA notices filed before that date.

First, PAGA notices will require a filing fee of $75, and must be submitted both online and by certified mail.

Second, the LWDA, will have longer to review PAGA notices in order to decide whether to investigate the allegations.  If the LWDA does not intend to investigate, it shall notify the employer and the employee within 60 days of the postmark date of the PAGA notice.  If the LWDA does not provide any such notice, plaintiffs must wait until 65 days after the postmark date of the notice to file suit.  (The current rule is 33 days.)

If the LWDA intends to investigate a PAGA complaint, it has 65 days from the postmark date of the notice to inform a plaintiff and his or her employer that it intends to do so.  The LWDA then has 120 days to conduct that investigation.  The 120 day period can be extended by an additional 60 days.

Third, a plaintiff will need to serve the LWDA with a copy of his or her PAGA complaint.  And, if  the plaintiff settles his or her PAGA claims, the plaintiff must notify the LWDA of that settlement by providing a copy of the proposed settlement.  That must occur when the plaintiff notifies the court of the settlement in order to seek approval under Labor Code 2699(l).  (That section requires a court to review and approve any proposed PAGA penalties.)  The plaintiff must also provide a copy of any order that denies or approves any PAGA settlement to the LWDA.

Finally, any employer that seeks to cure any PAGA violations must submit its notice electronically.

These amendments follow on the heels of AB 1506, which, as of October 2015, permit employers to cure certain defects on the wage statements that they issue to their employees.  In particular, employers are given 33 days to cure defects regarding the dates of the period for which the employees are paid.  They can also cure defects regarding the name and address of the employer.  However, the burden on an employer seeking to cure these defects is significant:  it must provide fully compliant wage statements to each aggrieved employee for each pay period during the three years prior to the date of the notice to the LWDA.

Significantly, the new amendments do not contain additional funding for the LWDA to increase its involvement in PAGA actions.  As a result, at least for the immediate future the responsibility for enforcing PAGA claims will continue to rest with plaintiff side employment attorneys.