Seyfarth Synopsis: PAGA was amended earlier this week, in connection with the California legislature's approval of the state's annual budget. The legislation did not implement any of the more substantive changes that Governor Brown's proposed budget had previously suggested—e.g., requiring PAGA plaintiffs to provide additional information when submitting pre-filing written notice to the LWDA or permitting the LWDA an opportunity to object to PAGA settlements. While some procedural changes are worth noting, they don't alleviate any of employers' main concerns with PAGA.
And that's to be expected, since the Legislative Analyst's Office previously recommended rejecting any substantive changes. In its view, such amendments should be considered only after (i) requiring additional information be provided to the LWDA about the actual results of PAGA litigation and (ii) increasing funding to the LWDA so that it could actually fulfill its role in PAGA enforcement. This week's alterations to PAGA procedure attempt to address these two preliminary objectives.
First, California employees used to be able to threaten employers with the prospect of PAGA litigation for the mere $3 cost of sending a written notice via certified mail. Effective today, hopeful PAGA plaintiffs must now pay a $75 filing fee and submit written notice via online filing. The filing fee and online system aim to assist the LWDA manage its PAGA burdens. But the 25x filing-fee increase likely won't curb employers' PAGA burdens, since employees often demand PAGA settlements that are 2,500x greater than even the new filing fee.
Second, courts now have to approve all settlements in PAGA actions—and not just settlements involving PAGA penalties. Contrary to some rumors, the amendments do not provide the LWDA an opportunity to object to PAGA settlements. The amendments do require PAGA plaintiffs to provide the LWDA with copies of any filed PAGA complaint, proposed settlements, and final judgments, but this week's revisions merely assist the LWDA in being informed of PAGA litigation.
Third, employees also now have to wait 65 (as opposed to 33) days after sending their written notice before filing suit, as the LWDA has 60 (instead of 30) days to potentially respond. Both employees and the LWDA generally do nothing during this period, so employers may be further annoyed that they still have but 33 days to potentially cure certain Labor Code violations.
Still, maybe the LWDA will become more involved in PAGA enforcement. The LWDA has launched a new PAGA website, though it notes that the statutorily required online filing system is not yet developed. It also notes the prior reality about the LWDA's role in PAGA enforcement—that employees and employers ordinarily won't hear anything from the LWDA.
Only time will tell if the LWDA is ready to become more involved. What remains certain—and what the PAGA amendments do not alter—is that California employers will continue to face an abundance of PAGA litigation.
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