Written by Ransom D. Boynton, Associate | KOEGLE LAW GROUP, APC |
Do not refresh your screens. Nothing has changed. No, the algorithm on your favorite music streaming service’s “shuffle” function is not broken. The fact that the same songs keep coming up every time in my articles is deliberate. I will continue to play “the greatest hits” of the Labor and Employment Litigation playlist until we are all singing the songs by heart at the top of our lungs.
That is because, even though the California legislature, in its infinite wisdom, has authorized the California Labor and Workforce Development Agency (“LWDA”) to “help” California businesses avoid the pernicious and predatory penalties of a Private Attorneys General Act lawsuit by “curing” violations in exchange for a reduction in those penalties, the medicine tastes terrible, and doesn’t allow businesses to cure the disease any better than the “Green Death” flavored cold‑medicine knocks out the common cold. Hooray for metaphors!
For those of you who don’t know, the Private Attorneys General Act (“PAGA”) allows employees to “step into the shoes” of state enforcement agencies to pursue civil penalties for Labor Code violations on behalf of themselves and other “aggrieved employees”—with now 65% of any penalties going to the State and 35% to the employees. It is a procedural statute, not a wage law itself, but its reach is vast, and penalties can accumulate quickly across large workforces.
As I stated, California’s recent overhaul of the Private Attorneys General Act offers a narrow but significant opportunity for employers to correct certain Labor Code violations before penalties accumulate—but the cure window is tight, technical, and costly if approached reactively.
For pre-notice compliance, employers who take “all reasonable steps” before receiving a PAGA notice, including audits, policy corrections, and proactively making employees whole, may reduce civil penalties to 15% of the statutory maximum. However, this reduction applies only to a specific list of Labor Code violations expressly designated as “eligible” under the revised statute. These include unpaid minimum or overtime wages, meal and rest period premiums, unreimbursed business expenses, and wage statement violations. It does not apply to other violations, such as failure to provide paid sick leave, tool reimbursement issues (outside of enumerated sections), or violations related to termination pay or retaliation.
Once a PAGA notice is served, the post-notice window begins. For wage statement violations, all employers, regardless of size, have just 33 days from the postmark date to both notify the LWDA of intent to cure and complete the cure. For other enumerated violations, a post-notice administrative cure process is available only to employers with fewer than 100 employees, measured over the one-year period preceding the PAGA notice. In those cases, the employer must submit a detailed cure proposal to the LWDA within 33 days of the postmark date of the notice. If the LWDA accepts the proposal and schedules a conference, the employer must then complete the cure within 45 days following that conference. This process is available only for the specific wage-and-hour violations enumerated in the statute and does not extend to the full range of Labor Code claims that may otherwise be actionable under PAGA.
If, within 60 days of receiving the notice, the employer takes “all reasonable steps” to come into compliance and makes all aggrieved employees whole, penalties may be capped at 30% of the statutory maximum. That’s still double the reduction available to employers who met the same threshold before receiving the notice (i.e., 15%). In both pre- and post-notice cure scenarios, these reductions apply only to the defined list of wage-and-hour violations, such as minimum wage, overtime, meal and rest breaks, expense reimbursements, and wage statements, not to the full spectrum of Labor Code infractions that may otherwise fall within PAGA’s reach. Confused? You’re not alone. And yes, it is that complicated!
What the statute doesn’t say, at least not out loud, is that you’ll likely need a small army to pull this off: legal counsel, payroll specialists, maybe even a labor economist to quantify exposure across a potentially multi‑year lookback, depending on the nature of the violation. It should be noted that for “cure” purposes, a California business isn’t just required to fix violations looking back one year, as under the PAGA statute, but instead for three years under the Labor Code itself. The LWDA can require substantiating documentation and expert analysis to ensure employees are properly made whole, including statutory interest and liquidated damages.
And here’s the kicker: the cure process is so new that nobody, not the LWDA, not the courts, not even the drafters, really knows how it is supposed to work in practice. At a recent conference, I directly asked an LWDA representative how an employer is expected to afford the administration of the process, including legal review, economic analysis, and the cost of making employees whole. He had no good answer. All he offered was that the statute of limitations is tolled during the cure process, ever mind that plaintiff’s counsel routinely file suit within days of the 65-day window closing, with no meaningful regard for whether the employer submitted a cure proposal or responded in good faith. That disconnect between the statute’s intent and its practical use is exactly what makes early compliance planning so critical.
True to form, Sacramento “drove it off the lot” without test-driving it to make sure the engine runs! Even worse, all of this falls on the employer’s dime. So, while a successful cure can dramatically reduce penalties and potentially avoid litigation altogether, a poorly executed effort can be both expensive and ineffective, and in some cases, worse than doing nothing!
I need to remind you here that, with more than 9,400 PAGA notices filed in 2024, PAGA penalties should scare you more than a slasher film. And unlike those Halloween horror flicks, this isn’t fiction. It’s not a question of if your business will face a PAGA claim—it’s a question of when. One ill-timed notice can trigger years of liability, stacked penalties per pay period, per employee, and legal fees that bleed your balance sheet dry. It could literally bankrupt your business and erase everything you’ve worked to build. So, as you stock the office candy bowl and half-heartedly participate in costume day, remember: the real fright this season isn’t ghosts or vampires, it’s failing to get ahead of a PAGA claim.
The takeaway is clear: the time to prepare for a PAGA cure is not when the notice hits your inbox. Employers who audit their timekeeping systems, payroll practices, and wage statement compliance now, before a claim ever arises, will be in the best position to act quickly, credibly, and affordably. In contrast, those who wait may find that the cure costs nearly as much as the disease. In a regime built to punish even good-faith mistakes, where specificity and documentation are everything, readiness is not optional, it’s essential.
Given the foregoing, we stand ready to conduct compliance audits tailored to your workforce structure, payroll practices, and industry-specific risks. An ounce of prevention, especially when tied to PAGA’s unforgiving timelines, can make the difference between manageable exposure and runaway litigation. The “cherry-flavored” version of this medicine is doing the audit now. Don’t wait until you’re already showing symptoms to come see us., and focus on building a strong team.
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