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Aim to prevent abuses and ensure a fairer, more efficient system for resolving labor disputes

The Private Attorneys General Act (PAGA) of California, which allows individuals to sue employers for alleged violations of labor law, is undergoing significant reform, the first since its establishment in 2004. This revision is particularly welcomed in sectors such as trucking, where PAGA lawsuits have posed a longstanding challenge for businesses in the state.

Initially conceived to improve labor compliance, PAGA has transformed into a tool that primarily benefits plaintiff attorneys at the expense of workers. Lawsuits often hinge on minor administrative errors, a situation aimed to be rectified by the recent agreement between Governor Gavin Newsom and the state Legislature, supported by the California Labor Federation and the California Chamber of Commerce.

Proposed legislative measures, such as AB2288 in the Assembly and SB92 in the Senate, aim to introduce significant improvements in the system. This includes setting limits on fines employers must pay for violations, as well as caps on damages for employees filing PAGA claims, contingent upon the company having taken “all reasonable steps” to correct violations.

En la imagen se muestra una representación de protección de empleados

PAGA Law: to the benefit of employees

Under current PAGA law, employees can initiate lawsuits without having directly suffered an infraction, leading to criticism of many lawsuits being opportunistic exercises for plaintiff attorneys.

The legislative proposal also aims to reintroduce personal responsibility for PAGA claimants, restoring a more traditional approach where claimants must demonstrate they suffered the same Labor Code violations they seek to pursue on behalf of other employees, eliminating actions based solely on peripheral observations.

Additionally, a one-year statute of limitations is being considered for PAGA claims, crucial to clarify the timeframe amidst legal disputes that have arisen due to previous loose interpretations of temporal rules.

These proposed changes not only seek to balance the interests of businesses and workers in California but also aim to prevent abuses and ensure a fairer, more efficient system for resolving labor disputes under PAGA.

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