The California Employee Civil Action Law Initiative was removed from the November 2024 ballot after Newsom and the state Congress, including the proponents of the initiative, reached a compromise. Initially, the original initiative dares to repeal the PAGA 2004 and replace it with the new law that would be known as the “Fair Pay and Employer Accountability Act”. However, upon withdrawal of the initiative from the November 2024 Ballot, the Office of the Governor announces the following PAGA reform proposal, agreed upon by the Governor and the proponents/supporters of the aforementioned initiative. Essentially, the PAGA reform proposal includes three key features:
- New system of relief
- Employers who are more proactive in complying with the labor code are treated with more grace (i.e. receives capped or lower penalties) than those who willfully violate Labor Codes.
- Increased penalty allows higher compensation for the damaged/wrong parties; the employees receive 25-35% of the penalty.
- In addition to monetary relief, the court can now grant injunctive relief to compel businesses to address/fix their violations.
- Efficient resolution process
- Wronged employee must now bring in their own claim.
- The scope of Labor Codes was expanded to allow business, especially small employers, to address more issues through LWDA instead of through aggressive litigation.
- To prevent prolonged litigation, the employers can request for early evaluation and stay of the court proceeding, and the court may limit the scope of claims.
- Stronger state enforcement
- DIR can expedite their hiring process so they can address claims more efficiently.