Bad policies and over-complicated labor laws have caused hundreds of businesses to flee in recent years, taking thousands of jobs with them. It’s no wonder California currently leads the nation in mass layoffs.
One of the key contributors is the Private Attorneys General Act, a law that allows an employee to take legal action against their employer for any perceived violation of the state’s more than 1,000-page labor code. That includes even accidental violations that could amount to little more than a typo on a pay stub.
Far from empowering workers, PAGA has become a cash cow for trial lawyers looking to target small- and medium-sized businesses. This has led to a surge in lawsuits, often with questionable merit. As a result, businesses are forced to navigate a costly legal minefield to stay afloat. Unfortunately, many get so tied up in legal fees and settlement payouts that they end up laying off employees or closing their doors altogether.