According to a just-released study, the California law known as the Private Attorneys General Act, or “PAGA”, has failed to improve Labor Code compliance, and instead has essentially privatized the enforcement of labor laws. As a result, Labor Code compliance has become increasingly secretive with insufficient oversight by the state.
Key Report Findings
The study, funded by the non-profit arm of CABIA, a state-wide trade group, states that the threat of PAGA lawsuits has been used to force businesses to settle PAGA claims prior to the filing of a lawsuit, precluding the state from meeting its statutory obligation to administer PAGA, and preventing the courts from their obligation to oversee PAGA settlements. The study also found that payments to attorney’s fees wholly overshadow payments to employees, with average attorney’s fees payments of $405,000 per case, and payments to the plaintiff employee averaging $12,282.
The complete study can be found at www.cabia.org. The study includes a breakdown by county of PAGA actions, showing that the vast majority of cases are filed in Southern California. Five percent of the state’s total cases are filed in Sacramento County. The study concludes that in light of budgetary changes, California now has the funding required to police Labor Code violations without the privatizing of enforcement now in place. The study further concludes that the state should resume such enforcement so as to cut out the “middleman” private attorneys who currently pay themselves one-third or more from each PAGA settlement.
