An agreement was reached between businesses and labor groups to resolve issues surrounding California’s unique law, which allows workers to sue employers for labor law violations on behalf of themselves, other employees, and the state. Business groups raised funds and rallied support for the referendum, which would repeal the private prosecutor law and replace it with a new system that would hold the state more accountable for enforcing labor laws. The groups have criticized PAGA for allowing lawyers to file costly, frivolous lawsuits against vulnerable companies. Governor Gavin Newsom’s office announced Tuesday morning that the agreement would change the state’s labor law violation penalty structure, give the Department of Industrial Relations the power to quickly hire and fill vacancies, allowing lawsuits to be handled quickly, and allow courts to issue injunctions to force companies to correct labor law violations. The agreement must be enacted and passed by the state Legislature. As of Tuesday, it was unclear whether it would replace existing legislation expanding PAGA or be folded into a series of fast-track bills approved through the state’s budget process. “We came to the table and reached an agreement that benefits both businesses and workers, and that will bring needed improvements to this system,” Gov. Gavin Newsom said in a statement. “This proposal maintains strong protections for workers, gives companies incentives to comply with labor laws, and reduces litigation.” “This package provides meaningful reforms that ensure workers continue to have strong avenues to resolve labor claims, while limiting frivolous lawsuits that have cost employers billions of dollars without benefiting workers,” said Jennifer Barrera, president and CEO of the California Chamber of Commerce. “We are pleased to have negotiated reforms to PAGA that will improve employer misconduct and help workers get compensation more quickly,” said Lorena Gonzalez, president of the California Labor Federation. “PAGA is an essential tool for workers to hold companies accountable for widespread wage theft, safety violations, and misclassification.” “We appreciate the work of the Governor’s Office and legislative leaders who helped us reach an agreement with the California Chamber of Commerce to protect this innovative law and strengthen labor law enforcement.” Details of the agreement, according to Newsom’s office, include: Changes to the penalty structure: Cap penalties for employers who quickly correct their policies and practices after receiving a PAGA notice; Create new, heavier penalties for employers who act maliciously, deceptively, or oppressively in violation of labor laws; Allow a greater portion of the fine money to go to workers, increasing the amount allocated from 25% to 35%; Litigation Changes: Expand the scope of labor laws that can be remedied to reduce litigation and correct employer problems; Improve the right to remedy process for small businesses, reducing costs and litigation; Allow courts to limit the scope of claims filed in court; Allow courts to issue injunctions to encourage companies to correct labor law violations. Requires that workers personally experience the violations alleged in the claim. Read more California top stories here | Download our app.
An agreement was reached between companies and unions to resolve issues surrounding a unique California law that allows workers to sue employers for labor law violations on behalf of themselves, other employees, and the state.
Business groups have raised funds and rallied support for a ballot initiative to repeal the private prosecutor law and replace it with a new system that would hold states more accountable for enforcing labor laws. The groups criticize the private prosecutor law for allowing lawyers to file costly, frivolous lawsuits against vulnerable companies.
Gov. Gavin Newsom’s office announced Tuesday morning that the agreement changes the penalty structure for violations of the state’s labor laws, gives the Department of Industrial Relations the authority to expedite hiring and filling vacancies and process claims quickly, and allows courts to issue injunctions to force companies to correct labor law violations.
The agreement still needs to be drafted and passed by the state Legislature, and it was unclear Tuesday whether it would replace existing legislation expanding PAGA or be folded into a series of fast-track bills that would be approved through the state budget process.
“We sat down to the table and reached a win-win agreement that will deliver needed improvements to our system,” Gov. Gavin Newsom said in a statement. “This proposal maintains strong protections for workers, provides incentives for businesses to comply with labor laws, and reduces litigation.”
“This bill will ensure that workers continue to have a strong avenue to resolve labor disputes and provide meaningful reforms to limit unfair lawsuits that have cost employers billions of dollars without benefiting workers,” said Jennifer Barrera, president and CEO of the California Chamber of Commerce.
“We’re pleased to have negotiated reforms to PAGA that will improve employer misconduct and ensure workers receive compensation more quickly,” said Lorena Gonzalez of the California Labor Federation. “PAGA is a vital tool for workers to hold companies accountable for widespread wage theft, safety violations, and misclassification. We appreciate the work of the Governor’s office and legislative leaders who helped us reach an agreement with the California Chamber of Commerce to protect this groundbreaking legislation and strengthen labor law enforcement.”
According to Newsom’s office, details of the agreement include:
Penalty structure changes:
- Sets a cap on penalties for employers who promptly correct their policies and practices after receiving a PAGA notice.
- Provides new, tougher penalties for employers who act maliciously, fraudulently, or oppressively in violation of labor laws.
- Ensuring that a larger portion of fines goes to workers, increasing the amount allocated from 25% to 35%
Changes in litigation
- Expanding the scope of labor law reform to reduce litigation and remedy employer problems.
- Improve the small employer rights redress process, reducing costs and litigation.
- Allows the court to limit the scope of claims presented at trial
- Allow courts to issue injunctions to force companies to correct violations of labor laws
- Require that workers personally experience the violations used to support a claim
See more California top news stories here | Download the app.
