A groundbreaking study on the impact of the PAGA (Private Attorneys General Act) demonstrates the degree to which the controversial law has benefited attorneys over the employees it was enacted to help.
The report was authored by Christine Baker, the former head of the California Department of Industrial Relations (DIR) under Gov. Jerry Brown and Len Welsh, the former head of Cal/OSHA under Gov. Arnold Schwarzenegger.
The study is the first of its kind to examine the impact of the PAGA statute and who it is helping, Tom Manzo, founder and president of the California Business and Industrial Alliance (CABiA), told the Northern California Record.
“This is data from actual cases from the DIR, and we think this data needs to get to all the legislators for their review,” Manzo said. “And the law can be reformed with legislative efforts, or if someone wanted to do a ballot initiative, because obviously, this law is supposed to be in favor of the employee – PAGA is supposed to protect the employee – and it’s not.”
The report includes a number of recommendations to benefit the state, which under PAGA has not realized the revenue compared to the attorneys filing PAGA claims.
Among the key findings in the report:
- "Large portions of PAGA recoveries consist of plaintiffs’ attorneys’ fees, with no apparent benefit to workers, employers, or the state.
- Although the number of cases decided by LWDA [California Labor & Workforce Development Agency] is very small compared to the number of cases resolved by lawsuits, available data appear to indicate that employees’ outcomes are much worse when the cases are filed with the courts rather than decided by LWDA.
- AB 1654 has set a precedent that points the way to alternative approaches to achieving swift and fair employee recoveries. The core administrative concepts that underlie the alternative AB 1654 offers to PAGA can be applied to an administrative system managed by the Labor Commissioner."
“If the PAGA case went through the state as opposed to the lawyers, it would be better for the workers and the case would be settled in half the time, to me that’s the bottom line,” Manzo said.