On November 5, 2024, California voters will have the opportunity to repeal and replace the California Private Attorney General Act (“PAGA”). The bill would double down on penalties for willful labor-law violators but entrust enforcement exclusively to a state agency. This would require all monetary penalties be awarded to employees, while barring attorneys from recovering any fees, unless specified by the labor code. The law would also supply resources to employers to ensure compliance.

The bill addresses defense attorneys’ concerns regarding PAGA litigation, emphasizing that it has predominantly been led by plaintiff lawyers’ fees, rather than recoveries for the workers, who only receive a small percentage of the settlement. Although employees would no longer have the ability to file lawsuits on behalf of the state, this would prevent plaintiff’s lawyers from recovering a large sum of profits.

Opponents of the bill argue that although this may benefit the workers, the biggest downfall is that it requires the Division of Labor Standards Enforcement to be a party to the complaint, claiming this is a “poison pill.” Opponents also argue the law would impose an extraordinary burden on the agency, which is already understaffed and underfunded. Based on the state Legislative Analyst Office’s recent report, the bill would cost the state over $100 million annually and would decrease the labor law enforcement revenues.

Be sure to look for the initiative on the upcoming November ballot. A “yes” vote would support the ballot and repeal PAGA, while a “no” vote would oppose the bill.

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