©2025 Seyfarth Shaw LLP www.seyfarth.com 2025 Cal-Peculiarities | 123 PAGA enables plaintiffs to sue for civil penalties for themselves and other aggrieved employees even if the plaintiffs have agreed to dismiss their own individual Labor Code claims. PAGA enables massive discovery of private information such as the contact information of a company’s employees. Arbitration agreements waiving representative PAGA claims are unenforceable. PAGA suits have powerfully proliferated since PAGA’s early days, especially when plaintiffs’ counsel discovered that PAGA actions were immune to arbitration agreements411 and that PAGA-only actions cannot be removed to federal court. While the annual number of PAGA notices sent to the LWDA remained under 700 during the first four years of PAGA’s existence, annual LWDA notices numbered in a much higher range—from 1,338 to 2,001— during 2008-2013, then jumped to a range of 3,703 to 6,307 during 2014-2018, and ranged from 2,690 to 6,431 during 2019 to 2021.412 PAGA notices sent to the LWDA decreased to 5,817 in 2022, but rebounded to 8,768 in 2023 and to a record high of 10,024 in 2024.413 A 2021 development further incentivizing PAGA actions was a Court of Appeal decision holding that venue is proper for a PAGA action in any California county where Labor Code violations allegedly occurred, even if the defendant’s principal place of business is not in that county and even though the plaintiff never worked there. Noting that a PAGA plaintiff is suing as the State of California’s designated proxy, the Court of Appeal stated: “We see no reason why the Legislature would restrict the proper venue to the location of an individual employee when she is suing on behalf of all aggrieved employees, not herself, and she has no individual claim.”414 5.15.1 The PAGA legislation When federal and state governments create civil penalties for certain statutory violations, the mission of enforcing these penalties is typically entrusted to public officials who exercise prosecutorial discretion. In California it’s different. PAGA415 created two significant problems for California employers. First, as of 2004, new civil penalties apply to violations of all Labor Code provisions “except those for which a civil penalty is specifically provided.” 416(See § 7.25.2.) Second, “aggrieved employees”417 may sue, in lieu of the Labor Commissioner, to recover the civil penalty, with the plaintiff and other aggrieved employees to collect 35% of the penalties (the remainder going to the state).418 The prevailing plaintiff also can recover costs and attorney fees.419 Recovery of civil penalties is not available, however, if the LWDA or its agencies or employees already have cited the employer for a violation of the same section(s) of the Labor Code based on the same facts and theories.420 The California Supreme Court enhanced PAGA’s power still further in 2009, when it held that PAGA authorizes individuals to sue under PAGA without having to satisfy the requirements of a class action, on the rationale that “an action to recover civil penalties ‘is fundamentally a law enforcement action designed to protect the public and not to benefit private parties.’”421 Calculation of PAGA penalties. Historically, PAGA vaguely called for penalties 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.”422 How does one determine when a “subsequent violation” has occurred? This had been the subject of disagreement between plaintiffs and employers until the 2024 reform. Leading up to the reforms, the Court of Appeal had stated that penalties reach $200 per pay period once the employer “has learned its conduct violates the Labor Code.”423 This ruling spawned substantial dispute over when and how an employer “learns” that its conduct violates the Labor Code, but the California Supreme Court never clarified the point.424
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