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California Heads for PAGA Reform

02 Jul

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Update Applicable to:Effective date
All employers in CaliforniaImmediately


What happened?

On July 1, 2024, Governor Gavin Newsom signed Private Attorneys General Act (PAGA) reform into law, making improvements to the system for both workers and businesses following an agreement reached between labor and business groups.


What are the details?

On June 27, 2024, Governor Gavin Newsom, in partnership with legislative leadership and business and labor groups, announced an agreement on needed reforms to the PAGA that avoids a contentious ballot measure campaign. The law (at the time proposed bills) in California introduced stricter plaintiff requirements, simplified PAGA litigation, reformed penalties, and strengthened state enforcement.

Newsom’s signature on these two bills represents a successful conclusion to months of hard work and compromise among all parties, and these changes aim to benefit employers while maintaining worker protection.


Key Bites for Employers


For a good breakdown click here

Since this impacts employers of all sizes, we highly recommend reviewing the changes and drawing your own conclusions.


Business Considerations

  • Employers should adapt their compliance strategies to align with the new regulatory landscape. This includes taking proactive steps to comply with the Labor Code and cure any violations they become aware of.
  • Employers should keep themselves updated about the latest labor laws and regulations, including changes to PAGA. They should review their company’s policies and practices to ensure they comply with these laws.
  • Employers should maintain open lines of communication with their employees. They should encourage employees to bring any concerns or potential violations to their attention before they resort to legal action.
  • Employers should keep accurate and comprehensive records of employee hours, wages, and other relevant information. Good record-keeping practices can help protect against unfounded claims.
  • Employers should ensure that pay stubs are accurate and comply with all requirements. PAGA claims often start when a terminated employee reaches out to an attorney who finds a mistake in the employee’s pay stubs.
  • Employers should consult with a legal professional to provide them with advice tailored to the specific circumstances of the business and how they can adapt to the changes.


Source References


Resources

Need help understanding how changes to employment laws will affect your business?

Learn more about how Vensure's California PEO services can help you navigate complex employment laws and keep your business compliant.


This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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