California’s 2024 reforms to the Private Attorneys General Act (PAGA) are showing early positive effects for both employees and employers, according to a report released by four leading employment law firms in the state. The findings come eighteen months after the changes were implemented.
The report highlights several key outcomes since the reforms took effect. Businesses have increased the frequency of audits and compliance training for management. There has also been a reduction in frivolous lawsuits, with claims being dismissed earlier in the process, which leads to faster and more cost-effective resolutions.
Another noted change is that litigation has become more manageable. The share of penalties awarded to employees increased from 25% to 35%, while the state now receives 65%. This adjustment is encouraging quicker settlements and reducing litigation costs. Additionally, an early resolution process through California’s Labor and Workforce Development Agency (LWDA) has helped minimize extended litigation.
Employers are also seeing lower penalties under the new system, which aims to promote fairness. A one-year limitations period was introduced, requiring plaintiffs to have experienced a violation within the past year before filing a claim. Courts now have greater ability to limit the scope of claims and evidence, ensuring cases remain manageable.
The report concludes that early data demonstrates reduced litigation and improved compliance, indicating that California’s PAGA reforms are achieving their goal of improving conditions for both employers and employees.
