California Updates Proposed PAGA Regulations

California’s Labor and Workforce Development Agency (LWDA) released changes to proposed Private Attorneys General Act (PAGA) regulations, including issues such as post-settlement amendments and “non-compliant filers.”

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After a public comment period and public hearing, the agency released modifications in early August.

Tweaks include:

• Filer designations changed. In the earlier version of the regulations, the LWDA introduced a “high-frequency filer” filter, which would necessitate a separate cover letter and certifications for an individual or law firm that has filed 200 or more PAGA notices in the preceding 12 months. The modifications to the regulations established two separate categories of high-frequency filer: an individual attorney filing 100 or more notices, or for law firms, filing 200 or more notices. The 12-month time period did not change. In addition, the initial regulations created a “vexatious filer” designation, which the LWDA updated to a “non-compliant filer,” defined as three or more non-compliant filings within a 12-month period, and that the filer “continued to file non-compliant notices after warning by the Agency.” The filer is subject to additional scrutiny and procedural consequences under the regulations.
• Post-settlement violation additions. Under the original regulations, claimants were prohibited from amending a PAGA notice to add new alleged violations after reaching a proposed settlement. In the amended version, the agency removed the total ban and instead would permit post-settlement amendments if delineated information is provided to the LWDA. Specifically, claimants would need to provide a list of the specific Labor Code sections allegedly violated, with an indication of which sections are new; a statement of the specific facts supporting the newly alleged violations; a statement of the investigation or discovery conducted for each newly asserted violation; a statement describing the manner in which the claimant personally suffered each newly asserted violation; and a statement describing how the worker protection purposes of PAGA and the interests of justice are furthered by the amendment.
• Notice of deficiency. The modified regulations added a provision giving the LWDA authority to provide written notice to claimants of deficiencies in their PAGA notices. The agency’s deficiency notice would identify how the notice fails to comply with the applicable requirements and give the claimant up to 30 days to amend their PAGA notice. The regulations highlight that “[t]he agency’s failure to issue a written notice under this subdivision shall not be construed as a determination concerning the sufficiency of any PAGA notice filed with the agency.”
• Settlement submission requirements. The first version of the regulations expanded settlement submission requirements, mandating that a PAGA plaintiff provide notice to all other employees who have filed LWDA notices against the same employer. The agency increased the requirements in the updated regulations, including a properly noticed motion with a memorandum of points and authorities explaining the penalty-valuation methodology, a statement of compliance with litigation-reporting obligations and a copy of any notice of related cases. A copy of the settlement must also be submitted and a verification of compliance with the regulation requirements in court submissions.

To read the updated proposed regulations, click .

Why it matters: California employers should keep an eye on the proposed regulations, now in their second iteration, which could have a significant impact on PAGA claims.