by Michelle Ferber and Ben McDonald
In 2004, California passed the Labor Code Private Attorneys General Act (PAGA) which authorizes employees to bring civil actions against employers for penalties that would otherwise be pursued and collected by the Labor and Workforce Development Agency (LWDA). Simplified, PAGA allows an employee to individually enforce existing California Labor Code violations on behalf of the state, and be paid handsomely for doing so. An employee who brings a successful PAGA claim is then entitled to 25% of whatever monetary penalties are imposed upon the employer. As many of the labor laws that PAGA applies to carry significant and compounding penalties, these actions can be very attractive for employees and expensive for employers.
Existing California law requires that employers furnish employees with specific information regarding their wages. This required information includes the dates of the pay period and the name and address of the legal entity acting as the employer. This has been one of the labor laws for which PAGA did not provide a cure period, allowing employees to file suit against an employer immediately upon the first violation.
However, on October 2, 2015, Governor Brown signed Assembly Bill 1506 to amend the Labor Code so that employers now have the ability to cure violations of the above laws prior to being sued by employees. Under the new law, a violation is considered cured upon a showing that the employer has provided a compliant, itemized wage statement to each aggrieved employee. Employers have the opportunity to cure one violation of these laws per twelve month period.
Taking effect immediately, this amendment is a step in the right direction for employers who have felt the powerful sting of PAGA claims.
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.