California’s 2024 PAGA Reforms: Key Changes Wrought in AB 2288, SB 92, and AB 1034

In late June 2024, California’s legislature approved landmark reforms to the Private Attorneys General Act (PAGA) that both strengthen worker protections and curb overly broad lawsuits. PAGA is a state law that allows employees to sue employers on behalf of the state in sort of a “mini-class action” for wage and hour labor law violations, essentially acting like a “private attorney general” and sharing in any recovery with the state. These changes – enacted in AB 2288, SB 92, and AB 1034 and signed by Governor Newsom on July 1 (AB 2288 and SB 92) and September 28 (AB 1034) – were negotiated to head off a voter initiative that would have repealed PAGA. That initiative petition was introduced but eventually withdrawn in time to keep it off the November ballot, as we reported in this blog at the time (see PAGA Repeal Bill Withdrawn From November Ballot: What It Means for California Employees and Employers, posted December 2, 2024).

The new laws encourage compliance by expanding an employer’s ability to fix mistakes and limiting penalties for proactive companies while giving courts tools to manage cases more efficiently. In practice, PAGA claims must now meet stricter requirements under these reforms, and both employers and workers will see some important changes in how violations are handled. Learn more about these changes below, and if you are a Bay Area employee or employer needing help with a California employment law matter, contact attorney Richard Koss to speak with an experienced San Francisco employment lawyer.

New Standing Rules: Personal Experience and Time Limits

Under the reforms, a worker can only file a PAGA representative claim for Labor Code violations they personally experienced. In other words, an employee must have suffered the exact pay stub or hour-rule violation they want to pursue on behalf of others. This “personal experience” requirement replaces the old rule that allowed a plaintiff to allege any violation affecting other workers. Law firm analyses explain that this will prevent attorneys from taking a “file first, investigate later” approach.

In addition, the reforms clarify that any alleged violation must have occurred within the normal one-year statute of limitations. A PAGA suit must now be based on a violation within the prior 12 months of the worker’s claim. Put simply, employees cannot sue over practices they only heard about or that happened long ago – they need their own recent records showing the violation. One exception is that nonprofit legal aid groups still may bring broader PAGA claims, but private plaintiffs will face these tighter standing rules.

Court Authority to Limit PAGA Claims (Manageability)

The new laws explicitly authorize judges to narrow PAGA cases for manageability. AB 2288 provides that a trial court “may limit the evidence to be presented at trial or otherwise limit the scope of any claim” so that a PAGA lawsuit can be fairly and effectively tried. In practical terms, courts can now carve out specific issues or timeframes and exclude irrelevant evidence in a PAGA case. For example, a judge could restrict a trial to certain dates or wage statements if broader claims would be unmanageable. This codifies what courts had urged: that PAGA cases must be winnowed to what can realistically be tried. By giving judges this discretion, the reforms aim to stop sprawling, inefficient litigation and keep PAGA cases focused on concrete claims.

Expanded Cure Procedures for Employers

AB 2288 greatly expands employers’ ability to “cure” alleged violations before or during PAGA litigation. Under the prior law, only a narrow set of wage statement errors could be fixed; the reform lets employers fix many more common violations. Now, alleged failures to pay wages, unpaid meal/rest break premiums, overtime errors, and unreimbursed business expenses can all be “cured” by the employer. To cure a violation, the employer generally must make the affected employee whole: for example, by paying the unpaid wages dating back up to three years, with 7% interest, any liquidated damages, and reasonable attorney fees. This puts a high bar on making entire claims go away.

The process differs for small and large employers. Companies with fewer than 100 employees can notify the California Labor Workforce Development Agency (LWDA) and submit a confidential proposal to cure the violations. The LWDA will then set up a settlement conference (similar to those used in Labor Commissioner cases) to try to resolve the dispute quickly. Larger employers (100 or more employees) can, once sued, ask the court to pause the case and conduct an Early Neutral Evaluation of the cure. Under this procedure, the court reviews the employer’s payment and if it finds the cure adequate, the PAGA claims are dismissed before trial. These new cure paths give employers a meaningful opportunity to correct mistakes and avoid penalties – provided they act promptly and fully compensate the affected workers.

Early Evaluation Conferences and Stays

SB 92 creates new tools for early case resolution. An employer sued under PAGA can request an immediate stay of the lawsuit and an early evaluation conference even before filing an answer. This “Early Neutral Evaluation” (ENE) is a court-supervised meeting where both sides discuss the claims soon after the suit begins. The goal is to see if a quick resolution or dismissal is possible.

All employers – large and small – may ask for this evaluation as soon as the case starts. Employers with fewer than 100 employees have an additional option: they can trigger a settlement conference through the LWDA before any lawsuit is filed. In effect, small employers can go to the LWDA early for a conference very much like an arbitration, to see if the notice issues can be settled. Together, these measures encourage prompt, low-cost resolution of disputes and can limit costly discovery and litigation by flagging weak or already-cured claims at the outset.

Other Key Reforms: Penalties and Remedies

The reforms also overhaul PAGA’s penalties and remedies. One major change is to reward compliance and fix harsh penalties. Employers who had no prior violations and took “all reasonable steps” to follow the law can have most penalties capped. For example, if a company was already in compliance before receiving a PAGA notice, the maximum penalty it faces is only 15% of what would otherwise apply. If the employer fixes the violations within 60 days of the notice, a 30% cap applies under certain conditions. In contrast, the full PAGA penalty still applies if an employer ignored the law or acted maliciously.

Technical violations also get much smaller penalties under the new law. A trivial error on a wage statement that caused no harm now carries at most a $25 fine. Likewise, any violation lasting 30 days or less (or four consecutive weekly pay periods) is capped at a $50 penalty. Notably, “stacking” of multiple penalties for derivative claims is disallowed – a single missed break payment, for instance, yields only one violation penalty, not separate fines under related code sections. Also, the higher $200-per-pay-period penalty can only be imposed after a court or agency previously found a violation (or if the employer’s conduct was malicious or fraudulent).

Another change is that workers get a larger share of any PAGA award. By law, 35% (up from 25%) of all penalties will now go to the aggrieved employees, with the rest to the state. Finally, AB 2288 explicitly adds injunctive relief as an available remedy. In practical terms, that means courts can require employers to change workplace practices or policies to remedy violations – the same relief the state labor agency could seek. Taken together, these amendments shift PAGA closer to its original goal of penalizing bad actors and making workers whole, while avoiding oppressive penalties for minor or inadvertent violations.

Extended Exemption for Unionized Construction Workers

A separate provision (AB 1034) affects only unionized construction employees. Under prior law, workers covered by a qualifying construction union agreement were exempt from PAGA until January 1, 2028. AB 1034 pushes that date out by another decade. Under the bill, any construction worker performing work under a valid collective-bargaining agreement that meets certain wage-and-hour criteria remains exempt from PAGA penalties until January 1, 2038. In short, many unionized construction employees will continue to resolve wage disputes through their contracts and arbitration, rather than through PAGA claims, for nearly another 15 years.

Employers and Employees Take Notice: PAGA Reforms Now in Effect

The 2024 reforms take effect immediately for new cases (applying to any PAGA notice submitted on or after June 19, 2024). Employers in California should review these changes closely: they affect how lawsuits can be brought and resolved, what violations can be cured, and how penalties are calculated. For workers, the impact is that only genuinely experienced violations will proceed, and even then employers have new tools to fix problems early. Overall, the new laws aim to balance employee protections with incentives for businesses to comply voluntarily while steering many disputes away from full-blown litigation.

For help resolving a claim related to wage and hour violations, workplace discrimination, or other employment law matters in the San Francisco Bay Area, contact attorney Richard Koss to discuss your legal rights and options.