Seyfarth Shaw LLP | www.seyfarth.com Litigating CA Wage & Hour and Labor Code Class Actions (22nd Edition) 75 employees argue that penalties are cumulative for distinct Labor Code violations, that figure could double or triple if there are multiple, recurrent Labor Code violations (or if one act of misconduct violates multiple Labor Code provisions).443 Attorney’s fees to the prevailing plaintiff would augment that total.444 When Arnold Schwarzenegger became governor in 2004, one of his first initiatives was to repeal PAGA. Although his attempt at total repeal was unsuccessful, he and the Legislature did scale back a few of PAGA’s most controversial provisions and inserted some additional procedural protections. SB 1809, signed into law in August 2004, effected the following changes to PAGA: The bill repealed the requirement (formerly in Labor Code section 431) that employers file a copy of their job application forms with the Division of Labor Standards Enforcement. Violations of Labor Code provisions that merely require notice, posting, agency reporting, or filing of documents with a state agency are now exempt from prosecution by aggrieved employees. An exception to this exemption was carved out for “mandatory payroll or workplace injury reporting.”445 All settlements in which penalties are paid must now be judicially approved.446 The court now may reduce the amount of civil penalties if, under the circumstances, the penalties otherwise would be “unjust, arbitrary and oppressive, or confiscatory.”447 Before filing suit, a PAGA plaintiff must exhaust an administrative remedies procedure that involves providing written notice of the particular Labor Code violation, containing “the specific provisions of [the Labor Code] alleged to have been violated, including the facts and theories to support the alleged violation,” to the employer and the LWDA for possible investigation.448 B. Requirement to Exhaust Administrative Remedies Before a PAGA plaintiff can sue, they must provide written notice to the employer and the LWDA of the particular Labor Code violation(s) for possible investigation. The notice must contain “the specific provisions of [the Labor conduct does not violate the Labor Code, it should be able to demonstrate that the proper penalty is $100 for each pay period, but under that scenario the employer would still be liable for $390,000 ($15,000 x 26 pay periods). See Amaral, 163 Cal. App. 4th at 1209 (“initial” violation encompassed violations covering multiple employees for multiple pay periods, up until such time as “the employer has learned that its conduct violates the Labor Code,” at which point “the employer is on notice that any future violations will be punished just the same as violations that are willful or intentional,” meaning the penalty rate will be doubled). 443 As the law is not clear on this, employers argue that aggrieved employees are entitled to only one penalty per pay period. 444 Lab. Code § 2699(g). 445 Lab. Code § 2699(g)(2). 446 Yet, a trial court’s approval of a PAGA settlement is subject to appellate review. For instance, the Court of Appeal has reversed a judgment approving a PAGA settlement when the trial court failed to consider the fairness of the settlement. E.g., Moniz v. Adecco USA, Inc., 72 Cal. App. 5th 56, 88–89 (2021) (reversing judgment; trial court abused its discretion by approving PAGA settlement with “disproportionate allocation of civil penalties” between two groups of employees when its approval order did not “assess[] the allocation and conclude[] it was fair”). 447 Lab. Code § 2699(e)(2). 448 Lab. Code §§ 2699(a), 2699(g)(1), and 2699.3.
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