Some of the most sweeping changes to employment law in recent
years are contained in the Private Attorneys General Act of 2004 ("PAGA"). The law has been nicknamed the "Sue Your Boss Law"
because of the incentives it gives employees to sue employers. It applies to all
California employers and emphasizes the need for total compliance with California's
unique and broad-sweeping rules.
The law encourages lawsuits over minor and major violations while
discouraging employees from using internal complaint procedures to resolve problems.
It has generated lawsuits that the Legislature has referred to as "frivolous."
Penalties for a single violation can equal $100 for each employee times
the number of pay periods. As an example, an employer with only 100 employees
could face penalties of $10,000 per pay period for just one violation.
If the employer uses weekly pay periods, that can produce $520,000 a year in penalties
alone. Strikingly, the penalties can be doubled for subsequent violations.
In this publication, Attorney Richard J. Simmons of the law firm of Sheppard,
Mullin, Richter & Hampton LLP reviews the new law. He also identifies proactive
strategies, high risk areas, and audit topics that are designed
to aid compliance efforts and reduce exposure to liability. Among the subjects
covered in this publication are the following:
- THE IMPORTANCE OF SELF-AUDITS
- TARGETS OF AUDITS
- NEW REMEDIES
- ROLE OF LABOR COMMISSIONER
- COURT REVIEW OF CLAIMS
- SIGNIFICANCE OF CATEGORY 1 AND 2 STATUTES
- OPPORTUNITY TO CURE SOME VIOLATIONS
- CHECKLISTS & HIGH RISK AREAS
- NEW PENALTY RULES
- CLASS ACTION CLAIMS
- EXHAUSTION REQUIREMENTS
- ONE-SIDED ATTORNEY'S FEE PROVISION
- SPECIAL RULES FOR WORKERS' COMP LAWS
- AVOIDING LITIGATION
- POSTING RULES
- NOTIFICATION RULES
- LABOR CODE CHECKLIST
- ROLE OF LEGAL COUNSEL