Join the Effort to Reform PAGA: Let's Create a Better, Fairer System for Workers and Small Businesses

Enacted in 2004 with the aim of providing an effective resolution for labor disputes, California's Private Attorneys General Act (PAGA) has been misused and has not achieved its intended goals. The Lodi Chamber of Commerce and the Cal Chamber, along with other advocates, support the Fix PAGA campaign. This campaign is focusing on legislative reforms that will help to alleviate the unfair burden on small businesses that PAGA has unintentionally created.

The Ineffectiveness and Inefficiency of PAGA for Workers:
Under the current approach, workers receive significantly less compensation through PAGA lawsuits compared to cases handled by the Labor and Workforce Development Agency (LWDA). On average, employees obtain only $1,300 from a PAGA lawsuit, while state-decided cases yield a more substantial $3,956. Moreover, the prolonged resolution time for PAGA cases—310 days more than state-investigated cases—creates an undue burden on workers seeking timely restitution. Not only do workers have to wait substantially longer, lawyers are pocketing a good deal of the total amount awarded. In a recent settlement, attorneys received $21 million, leaving a mere $108 for each affected worker. A new system needs to be created that prioritizes fair and swift compensation for workers.

Unfair Burden on Small Businesses, Non-Profits, and Employers:
Small businesses, non-profits, and various employers have become easy targets for predatory lawsuits under PAGA, often for minor technical violations. These entities, including family-run businesses, local governments, school districts, and labor unions, face disproportionate challenges. PAGA lawsuits have led to over $10 billion in payments from employers since 2016, with a significant portion directed towards lawyers rather than the affected workers. The threat of lawsuits for minor infractions, such as typographical errors on pay stubs, puts undue pressure on businesses to settle, creating an environment ripe for abuse and extortion. It is evident that the current PAGA framework unfairly burdens employers, hindering their ability to operate without constant fear of litigation.

Proposed Solutions for a Better, Fairer System:
The Fix PAGA campaign proposes essential reforms to create a more efficient and equitable system for workers and employers alike. Advocates suggest expanding on existing LWDA processes, proven to resolve employee claims faster and provide workers with more substantial restitution. Key solutions include:

• Faster Resolution for Workers: Utilizing the LWDA process to streamline resolutions and minimize the need for lengthy lawsuits.
• Ensuring Direct Compensation to Workers: Reforms should ensure that the majority, if not all, of the recovered funds go directly to workers, preventing lawyers from disproportionately benefiting.
• Tougher Penalties for Violations: Implementing increased penalties for employers who willfully violate labor laws to deter unlawful practices.
• Proactive Industry Investigations: Encouraging LWDA and other enforcement agencies to investigate industries and businesses with high incidences of labor law violations.
• Guidance for Businesses: Providing information and guidance to small businesses, non-profits, and others on navigating labor laws to avoid costly legal challenges.

Follow the links to the Fix PAGA Campaign to sign up along side the Lodi District Chamber of Commerce and Cal Chamber in our efforts to promote PAGA reform.