California’s Private Attorneys General Act (PAGA) has made the Golden State even more golden for trial attorneys, while raising litigation challenges via frivolous lawsuits for employers and costing them thousands, if not hundreds of thousands of dollars.
In addition to bringing individual or class-action claims, disgruntled employees can sue under PAGA for any alleged labor or wage and hour violations on behalf of themselves and other workers, including not spelling their name correctly on a paystub or missing paycheck information. These violations can be stacked, with multiple penalties for each statutory wage violation and can quickly add up.
PAGA was intended to deputize citizens as private attorneys general to enforce the labor code in light of the state government’s limited resources, but so far it has only turned out to be a “free money barrel” for plaintiff attorneys hoping to turn an easy buck.
PAGA allows employees to step into the shoes of state regulators to recover civil penalties and to receive part of the amount recovered as compensation. Seventy-five percent of the penalties recovered go to the state and 25% go to employees, but in many cases the employee is left holding an empty bag.
Supporters of PAGA will point to a handful of high-profile cases to use as examples of the act protecting workers’ rights and argue against reform. What is often left out, however, is that the workers receive very little of the claim settlement, while their attorneys make millions. One such example is the string of lawsuits filed against companies for failing to provide cashiers and bank tellers with seating.
The reality is that this law does little to help employees, and everything to help deceitful trial attorneys get rich quick. When the money is divvied up, employees often walk away with little more than spare change while the attorneys rake in millions.
Was this the intent of PAGA? To stuff the pockets of plaintiff attorneys?
PAGA needs significant reforms to return the statute to its original intent. It was never meant to be a vehicle for punishing businesses for minor technical violations with liability in the multimillions and giant fee award payments to plaintiffs’ lawyers. For reforms to take place, we need real leaders in Sacramento and now is the time for them to step up.
Tracey Enfantino is chair of the Business San Jose Chamber PAC.