The official title and summary of the California Fair Pay and Employer Accountability Act of 2022 were released last week, which, if approved by voters, would change the way in which workers file labor code claims.
"It will ensure that the employee can go to the Labor Commissioner for the redress of wage and hour violations and they will get their claims heard faster,” said Brian Maas, president of the California New Car Dealers Association. “They'll get more money than they would get if they waited for a PAGA lawsuit and they are going to keep one hundred percent of the penalties which our initiative provides."
The Private Attorneys General Act (PAGA) was enacted in 2004 and allows employees to file lawsuits seeking civil penalties on behalf of themselves, other employees, and the State of California for labor code violations.
However, Maas says PAGA has been abused.
“A number of technical claims have been filed that give trial lawyers the opportunity to get quick settlements and earn a large recovery that has nothing to do with whether or not the employee was properly compensated,” he said. “It’s clear that trial lawyers can use PAGA as leverage to file claims against employers even though there really isn't much direct liability for an employer in some cases.”
If approved by voters, the ballot initiative would double all penalties for businesses willfully violating wage and hour laws with workers receiving 100 percent of the penalties rather than having to divide the money between the state and the worker.
“If we don't fix this now, it's likely to get worse,” Maas told the Southern California Record. “Many of us in the business community and others have tried to enact PAGA reforms in the legislature, and the legislature has been unable or unwilling to pass those. So, going to the voters is really the best option."
A coalition of employer groups is helping to fund the signature-gathering process, which is expected to begin this month.
"Our polling and research indicate that if we get our message out, that the measure could pass us next November," Maas added. "We're very optimistic that voters will understand that the current PAGA system is broken. Employees don't get compensated quickly. They don't get the majority of settlements. Those settlements go to trial lawyers, not employees, and this proposal will fix that balance and ensure that employees get properly compensated."