A last-minute political compromise has prevented an attempt to repeal a California law that allows workers to sue employers for workplace violations – a legal tool that has cost companies billions of dollars.
The compromise announced Tuesday by Gov. Gavin Newsom followed meetings with business leaders and the powerful California Labor Federation about ways to change the 2004 law, the Private Attorneys General Act.
The law, known as PAGA, allows employees to file civil lawsuits — on their own behalf and on behalf of colleagues — against companies, sometimes costing them tens of millions of dollars in settlements.
“We sat down at the table and negotiated a deal that works for both businesses and workers and will make necessary improvements to this system,” Newsom said in a statement Tuesday. “This proposal provides strong protections for workers, incentivizes companies to comply with labor laws and reduces litigation.”
A study released in February by a coalition against the law found that it has cost companies around $10 billion since 2013. The same report noted more than 3,000 proposed settlements under the law in 2022, a tenfold increase from 2016. (In most cases, the state records proposed settlements, but not the amount ultimately paid.)
In 2023, Google settled for $27 million after employees used the law as a basis for accusing the tech company of unfair labor practices. And in 2018, Walmart employees reached a $65 million settlement after accusing the retailer of not providing enough seating for workers.
Business groups got a measure repealing the law on the November ballot. They agreed to withdraw the measure once a law reflecting the compromise is passed and enacted.
Labor groups have cited the law as a necessary check on companies.
A recent report from the UCLA Labor Center concluded that the proposed ballot measure would effectively eliminate “one of California’s workers’ most powerful remaining tools to prevent and correct wage theft and other workplace abuses,” said Tia Koonse, legal and policy research manager for the center.
The compromise calls, among other things, for the introduction of higher penalties for employers who violate labor laws and an increase in the amount of fines owed to employees from 25 percent to 35 percent. In addition, it provides that any legal action must be initiated by the employee affected by the violations described in the lawsuit.
“This package provides meaningful reforms that ensure workers continue to have a strong means of pursuing employment rights while limiting the frivolous litigation that has cost employers billions without benefiting workers,” said Jennifer Barrera, president of the California Chamber of Commerce issued a statement.
Lorena Gonzalez, president of the California Labor Federation, said in a statement that her group was pleased to have “negotiated reforms to PAGA that will better ensure abusive practices by employers are cured and workers recover more quickly.”
“PAGA is an essential tool to help workers hold companies accountable for widespread wage theft, safety violations and misclassification,” she said.
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2024-06-18 23:36:22
www.nytimes.com
