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In 2004, California enacted the Private Attorney General Act (“PAGA”) which allowed aggrieved employees to pursue penalties against their employer on behalf of the Labor and Workforce Development Agency (“LWDA”). The act was initially passed because the LWDA lacked the resources to pursue every claim against employers considered “non-compliant.”

On June 15, 2016, the California Legislature approved Governor Jerry Brown’s budget which included a number of significant changes to PAGA. Governor Brown emphasized the importance of “stabilizing and improving the handling of PAGA claims,” which is why the amendments called for more involvement from the LWDA. More support from the LWDA initially implies that it will have more control and enforcement, with more opportunity to investigate and issue citations for Labor Code violations.

It remains unclear how these amendments will impact present and future PAGA claims but it’s certain that the LWDA will have a larger role in all cases and settlements, with more time and funds at its disposal. As the LWDA becomes more active with proposed PAGA settlements, some are worried that it will actually complicate the process and lead to higher litigation costs. The future of PAGA is uncertain; the ultimate goal of these amendments was to decrease employers’ costs and reduce litigation but the reality remains unknown.

Illustrative of some of the ways this system is being upgraded and more closely monitored are these changes; (1) All employee complaints to the LWDA are to be submitted online, rather than by mail as was previously the case; (2) There is a new filing fee – $75; (3) The LWDA now has 60 days to review employee complaints to determine whether it is going to do its own investigation, up from the previous provision of 30 days; (4) PAGA settlements must all be court approved, and the LWDA is to receive the proposed settlement when it is filed with the court.

To see the amendments to the Private Attorneys General Act, click here.