A bill that would have helped curb excessive litigation by requiring an employee bringing a PAGA (Private Attorney General Act) claim to first inform the employer of specific Labor Code violations and available remedies failed to gain traction during the just concluded legislative session.
“Had the employer known, maybe they could have remedied the situation and avoided a lawsuit,” Lauraine Bilfulco, chair of the Labor and Employment Committee at the California Small Business Association (CSBA) told the Northern California Record.
“PAGA claims can result from slightly incorrect information on a pay stub – something fairly easy to correct without it having to be an onerous and costly lawsuit, Bilfulco said. “AB 2530 seemed to our organization really rational and reasonable and yet it didn’t go anywhere.”
The filing requirements PAGA bill, which was introduced in February, never made it out of committee.
The 2004 PAGA statute, enacted by Gov. Gray Davis shortly before he left office, has resulted in thousands of trial lawyers suing employers on behalf of workers for alleged infractions of California labor laws, many of which have been slight infractions.
“PAGA really has been challenging for California employers,” Bilfulco said. “If there are employers that don’t follow rules, it’s a recourse for employees, but it has evolved to where has become extraordinarily easy to bring claims.”
The CSBA evaluates dozens of bills each year when considering which ones to support.
AB 2530 received less attention from lawmakers as the COVID-19 pandemic unfolded but could make a comeback in the next legislative session, Bifulco indicated.
“We would honestly support any kind of bill that brought a little more reasonableness to the table,” Bilfulco said. “We’re simply trying to strike a balance; let’s try for a bill that like this one would give the employers a chance to remedy it before the legal action could be filed.”
“I think personally I don’t see enough small employers really aware of what PAGA is; they only become aware after they have been slapped with a PAGA lawsuit,” Bilfulco added. “If we had more businesses supporting reform, maybe our legislature would hear us better.”