Website Provides Updates on Fair Pay/Employer Accountability Initiative

A new website that provides updates and information on The California Fair Pay and Employer Accountability Act is now available at stoptheshakedown.com.

The California Chamber of Commerce strongly supports this proposed initiative and is encouraging members to learn more about the important reforms it enacts and contribute to the “yes” campaign. Supporters may make monetary contributions through the website.

Frivolous lawsuits brought under the Private Attorneys General Act (PAGA) have cost California businesses billions of dollars, all while workers are left waiting years to receive very little and attorneys walk away with millions.

Labor Agency Enforcement

The California Fair Pay and Employer Accountability Act would replace PAGA with increased enforcement mechanisms in the hands of the Labor and Workforce Development Agency (LWDA) so that workers recover wages faster and employers are no longer targeted by frivolous private litigation.

PAGA was enacted in 2004 to help the LWDA enforce California’s labor laws. It allows employees to sue for any Labor Code violation as if they were the state.

Because PAGA deputizes private attorneys to file lawsuits on behalf of those employees, it has been abused. Attorneys can leverage PAGA’s penalties to get big settlements even if the claims have no merit. The employer ends up paying a hefty sum with much of the money going to the attorneys and very little going to workers or the state.

PAGA lawsuits have increased more than 1,000% since the law took effect in 2004. By 2016 and every year since, the LWDA has received between 4,600 to 6,000 PAGA notices. Employers have paid out billions of dollars in PAGA penalties since 2004.

Initiative Reforms

The California Fair Pay and Employer Accountability Act would solve this problem by:

• Replacing PAGA with alternative enforcement mechanisms through the state;

• Ensuring 100% of penalties go to workers;

• Speeding up recovery of wages and penalties for workers; and

• Doubling penalties where employers willfully violate the law.

Supporters of the California Fair Pay and Employer Accountability Act have begun gathering petition signatures to place the initiative on the November ballot.