As part of our commitment to keeping our clients informed, Pathway Group wants to share important information about the upcoming California Employee Civil Action Law and PAGA Repeal Initiative, set to appear on the November 2024 ballot. This initiative proposes significant changes to how labor law enforcement is handled in California, aiming to repeal the Private Attorneys General Act (PAGA) and replace it with the Fair Pay and Employer Accountability Act (FPEAA).

Key Changes Proposed by the Initiative:

1. Doubling Penalties: Statutory and civil penalties for willful violations will double, increasing the stakes for compliance.
2. Direct Compensation: Harmed employees will receive 100% of monetary penalties, eliminating the current split where 75% goes to the state.
3. Enhanced Resources for Compliance: The initiative mandates resources to help employers ensure they are compliant with labor laws.
4. DLSE Involvement: The Division of Labor Standards Enforcement (DLSE) will be involved in all labor complaints, streamlining enforcement.

Benefits for Employers

1. Reduced Litigation Costs: Under the FPEAA, employees would file complaints directly with the Labor Commissioner instead of suing in civil court. This change can significantly reduce legal fees, particularly the high costs associated with PAGA litigation, which often benefits attorneys more than employees.
2. Streamlined Compliance: The initiative would establish a Consultation and Policy Publication Unit within the DLSE to help employers correct compliance issues confidentially and without penalties. This proactive approach allows businesses to address potential problems before they result in costly penalties.
3. Focus on Actual Violations: The new law aims to ensure penalties are enforced for actual labor code violations experienced by employees, rather than broad, representative lawsuits. This focus helps maintain fair treatment while preventing frivolous or exaggerated claims.
4. Elimination of Attorneys’ Fees: By barring the award of attorneys’ fees in enforcement proceedings, the initiative reduces the financial incentive for excessive litigation driven by plaintiff lawyers.

Implications for Businesses

• Increased Accountability: Businesses must be more vigilant as penalties for willful violations will be higher.
• Enhanced Support for Compliance: Access to resources and confidential consultations will help businesses stay compliant.
• Fairer Enforcement: Direct compensation to employees ensures that penalties serve their intended purpose.

This initiative aims to balance the protection of employee rights with providing businesses the tools they need to comply with labor laws effectively. For more details, visit the full text on Ballotpedia here.

Pathway Group is here to help you navigate these changes and ensure that your business remains compliant and successful.