California’s 2024 reforms to the Private Attorneys General Act (PAGA) are showing early positive results for both employers and employees, according to a new report from four leading employment law firms in the state. Eighteen months after the reforms took effect, these firms note improvements such as faster settlements, narrower lawsuits, and increased collaboration between employers and workers.
Key outcomes highlighted in the report include more frequent audits and compliance training by businesses. The number of frivolous lawsuits has decreased, with claims being dismissed earlier in the process, resulting in quicker and less expensive resolutions. Litigation has become more manageable due to changes that increase the employee penalty share from 25% to 35%, while the state receives 65%. This adjustment is encouraging timely settlements and lowering litigation costs. Additionally, an early resolution process through California’s Labor and Workforce Development Agency (LWDA) is reducing the need for lengthy legal battles.
The reforms have also led to reduced penalties for employers, which supporters say promotes fairness. Plaintiffs now must have experienced a violation within the past year to file a claim, introducing a one-year limitations period. Courts are also able to limit the scope of claims and evidence presented to ensure cases remain manageable.
The report concludes that “with early data already showing reduced litigation and stronger compliance, California’s PAGA reforms are delivering on the promise to improve the system for both employers and employees.”
