Do You Know What Rights the PAGA Act Gives You?

A common point of confusion is the difference between a PAGA lawsuit and a traditional class action lawsuit. While both involve a group of affected employees, they are fundamentally different legal actions.

• PAGA Lawsuits: These are “representative actions” brought on behalf of the State of California. The lead plaintiff, known as the aggrieved employee, represents the state’s interest in enforcing labor laws. The primary goal is to collect civil penalties for every violation affecting every employee.
• Class Action Lawsuits: These are brought on behalf of a group, or “class,” of individuals who have suffered similar damages. The goal is typically to recover those damages, such as unpaid wages or overtime. Class actions have strict certification requirements that are not necessary for a PAGA claim.

Because PAGA claims are representative actions, they can often include a broader range of employees and violations than a class action might allow.

Civil Penalties Under PAGA

The core of a PAGA claim is the recovery of civil penalties. These penalties are designed to punish employers for breaking the law and deter future violations. The penalties are structured as follows:

• Default Penalty: For Labor Code violations that do not have a specific penalty amount, PAGA establishes a default penalty of $100 for each aggrieved employee per pay period for the initial violation and $200 for each aggrieved employee per pay period for each subsequent violation.
• Distribution of Penalties: If a PAGA lawsuit is successful, the recovered civil penalties are distributed in two ways. 75% goes to the California Labor and Workforce Development Agency (LWDA) to fund enforcement efforts, and the remaining 25% is distributed among the aggrieved employees.

These penalties can accumulate rapidly, especially at large companies with many employees and systemic violations, resulting in substantial financial consequences for non-compliant employers.

Common Labor Code Violations in PAGA Claims

A PAGA claim can be based on nearly any violation of the California Labor Code. Some of the most common violations that lead to PAGA lawsuits include:

• Wage and Hour Disputes: Failure to pay minimum wage, unpaid overtime, or off-the-clock work.
• Meal and Rest Break Violations: Not providing employees with their legally required meal periods or rest breaks.
• Inaccurate Wage Statements: Failing to provide pay stubs that accurately reflect hours worked, pay rates, and deductions.
• Misclassification of Employees: Improperly classifying employees as independent contractors or exempt from overtime to avoid paying fair wages and benefits.
• Untimely Payment of Final Wages: Failing to pay a departing employee their final wages within the legally mandated timeframe.
• Failure to Reimburse Business Expenses: Not reimbursing employees for necessary work-related expenses, such as mileage or equipment costs.

If you have experienced any of these issues, you may have grounds to file a PAGA claim.