There’s only a few days left until the June 6th deadline to pass new legislation out of the California state legislature – and one particularly harmful bill is trying to squeeze its way through.
California state senator Scott Wiener is pushing for a major change to the state’s labor laws that comes with a significant cost for California businesses. The proposal, Senate Bill 310, neutralizes recent reforms to the state’s Private Attorney General Act (PAGA) and creates yet another avenue for trial attorneys to target employers for alleged labor code violations – this time, without going through the state or through PAGA.
Instead, this bill would create a new private right of action for wage and hour claims. That means increased litigation and costs for businesses who only recently received some relief from the state’s harmful PAGA law.
Under PAGA, California businesses are subject to a mountain of unscrupulous and costly claims. PAGA grants employees the power to bring a suit directly against their employer.
In practice, this results in employers being targeted by greedy trial lawyers for small or unintended violations of the state’s over 1,100+ page labor code. Even something as mundane as a typo on a paystub could result in hundreds of thousands of dollars in legal and settlement fees for businesses.
Recent negotiations between the state’s labor and business leaders delivered long-awaited reforms to PAGA, such as expanded cure and remediation periods and time limits of filing claims. The goal was to disincentivize legal action and allow employers to make good faith efforts to resolve issues before they spiraled into costly legal battles.
But Senate Bill 310 will help trial attorneys circumvent these reforms. It’s no wonder, considering the bill’s sponsor has received thousands of dollars in campaign contributions from trial attorneys.
The legislation would create yet another pathway to impose penalties and fines on California businesses. And instead of splitting assessed penalties with the state, lawsuits brought under Senate Bill 310 would allow trial attorneys and their clients to keep 100% of the fees. This windfall comes in place of the current 65% to 35% split between state and attorney under PAGA. When you consider the attorneys are getting their cut from a percentage of worker penalties, it’s a no brainer as to which law best benefits their bottom line.
In addition to creating a lucrative new business model for trial attorneys, this bill puts yet another target on the back of medium-and-small businesses across the state. Our job creators have a hard enough time surviving in California as it is. Bills like this will only continue to drive entrepreneurs and the jobs they create out of state.