A new report authored by the former California Department of Industrial Relations Director, Christine Baker and former Cal/OSHA Chief, Len Welsh finds that California’s Private Attorneys General Act (PAGA) — a California law that privatized justice by allowing employees to file suit against their employer for any minor or accidental infraction of California’s labor code — has failed employees, employers, and the State.
The study provides important data that shines a light on PAGA, contrasts the law’s outcomes with those that may be anticipated from an alternative process, and makes recommendations accordingly. Overall, the study finds that employees recoup less money through court cases than through state-decided cases, mainly because trial attorneys receive exorbitant payouts from the former.
Key report findings:
The current average payment a worker receives from a Labor and Workforce Development Agency (LWDA) decided case is 95 percent greater than for a PAGA case filed with a court: $4,100 from an LWDA-decided case, versus $2,100 from a PAGA court case.
Workers are receiving higher awards from LWDA-decided cases, but employers are paying out 60 percent less per award. On average, employers pay $504,000 per LWDA-decided case and $1,232,000 per PAGA court case.
Attorneys who file PAGA cases with a court are compensated with fees that represent 33 percent or more of the workers’ total recovery, coming to more than $405,000 per case on average.
While the number of PAGA cases filed has remained relatively flat on average over the last five years, the amount of employer penalties collected by LWDA–which likely follows the same trend as overall employer payouts–has increased by a factor of 6.
The report was supported by the CABIA Foundation.
This groundbreaking study provides empirical evidence to back up what countless California business owners already know: PAGA is a harmful law that does more to fill the pockets of unscrupulous trial attorneys than to protect employees.