California Businesses and Labor Reach Deal on Private Attorneys General Act Reform

California Businesses and Labor Reach Deal on Private Attorneys General Act Reform
Photo by Jose Antonio Gallego Vázquez / Unsplash

California businesses and labor advocates have reached a significant agreement to amend the state's Private Attorneys General Act (PAGA), a law allowing workers to sue employers over labor violations. This deal, brokered with mediation from Governor Gavin Newsom's office, aims to balance worker protections with business concerns over excessive litigation and financial penalties.

Background and Legislative Landscape

Originally passed in the early 2000s, PAGA was designed to empower workers to address labor violations independently when state resources were insufficient. Over the years, it has generated substantial revenue for the state but has also faced criticism from business groups for encouraging what they perceive as frivolous lawsuits.

Agreement Overview

The recent agreement between the California Chamber of Commerce, the California Labor Federation, and legislative leaders involves several key reforms:

Top key reforms

  • Reduction of Penalties: Employers notified of labor violations can reduce monetary penalties by promptly addressing issues.
  • Time Limit on Claims: Lawsuits under PAGA will now be limited to violations experienced within the past year.
  • Increased Worker Compensation: Workers involved in PAGA suits will receive a higher percentage of settlements, up from 25% to 35%.
  • Judicial Oversight: Judges overseeing PAGA cases can issue injunctions to stop ongoing violations, enhancing enforcement capabilities.

Immediate Implications and Reactions

The deal prevents a business-backed ballot measure aimed at repealing PAGA from going to voters in November. Both sides anticipate savings from avoiding costly campaigning efforts. Governor Newsom and legislative proponents are expected to support a bill reflecting the agreed-upon reforms in the upcoming session.

Challenges and Future Considerations

While this agreement marks a significant compromise, challenges remain in ensuring equitable enforcement and addressing ongoing criticisms from both business and labor perspectives. The state's labor agencies are urged to streamline processes and reduce backlogs in handling wage theft claims, supported by emergency hiring authority granted to the Department of Industrial Relations.


The reform of PAGA represents a balanced approach to maintaining worker protections while addressing business concerns about excessive litigation. As California moves forward with legislative amendments, the focus will be on implementing these reforms effectively to enhance workplace compliance and protect workers' rights across the state.

Subscribe to The Arias Journal

Don’t miss out on the latest issues. Sign up now to get access to the library of members-only issues.