In a recent letter shared with CABIA, Steve McIntyre, owner of Monterey Pacific LLC, has brought to light the challenges his business faces due to the Private Attorneys General Act (PAGA).
One of the core issues with PAGA is its allowance for employees to sue for minor infractions, such as a typo on a pay stub. This has led to a surge in lawsuits that are more about financial gain for trial lawyers rather than addressing genuine labor law violations.
That’s exactly what happened to Steve’s family-owned business which has been in operation for 28 years and is now at risk of bankruptcy from mediation under a PAGA complaint for minor clerical errors made by a contractor. Now, his business is potentially liable for multimillion-dollar penalties and legal fees.
In the letter, Steve highlighted how PAGA, originally designed to protect workers, has done the opposite for his employees:
“You would be shocked at how well we treat our employees and how hard we try to equitably look after their best interest. That’s what makes this situation so much more heartbreaking. For the first time in 28 years, 207 employees will not get a bonus this year, as we will need the money for settlement for something that happened through no fault of our own. One can imagine how difficult it is to try and explain this to our workforce but such is the reality.”
Steve also pointed out how the penalties for minor errors are alarmingly high, even more severe than fines for workplace fatalities imposed by Cal-OSHA. Adding to the burden, there is no available insurance to cover such claims, leaving businesses dangerously unprotected.
Sadly, Steve’s sentiment echoes the frustration felt across the Golden State. In 2023 alone, nearly 8,000 PAGA notices were filed with the California Labor and Workforce Development Agency, marking a 34 percent increase from the previous year. These numbers are not just statistics; they represent the stifled dreams and financial nightmares of those who dare to contribute to California’s economy.
Steve’s story is a stark reminder of the need for legislative reform. It is time for a balanced approach to worker protection laws that considers the realities of running a business and the consequences of punitive legislation on the broader economic landscape of California.