Why PAGA Terrifies Employers — and Why That’s Good for You

PAGA — the Private Attorneys General Act — is one of the most powerful wage enforcement tools in California. It allows a single employee to file a lawsuit on behalf of themselves and all other current and former employees who suffered the same violations, and collect civil penalties that go far beyond what an individual wage claim would recover. Employers know what PAGA means. Most workers do not.

What PAGA Does

Under Labor Code §2699, an employee who has suffered a Labor Code violation can file a civil action as a proxy for the State of California to recover civil penalties for each violation. The employee keeps 25% of the penalties recovered. The State gets 75%. But the total penalty pool — which the plaintiff’s attorney collects a contingency fee on — can be enormous when the violations affected dozens or hundreds of coworkers.

The Numbers That Make Employers Settle

PAGA penalties for most wage violations are $100 per employee per pay period for initial violations and $200 per employee per pay period for subsequent violations. For an employer with 50 employees who had unpaid overtime for two years, the math produces millions of dollars in potential PAGA exposure — on top of the underlying wage claims. This is why employers with documented wage violations almost always settle PAGA claims quickly.

How to Initiate a PAGA Claim

Before filing a PAGA lawsuit, the employee must send a written notice to the Labor and Workforce Development Agency and to the employer by certified mail. The LWDA has 65 days to investigate. If the LWDA does not take action, the employee may file the civil action. An employment attorney handling PAGA cases typically works on full contingency — no upfront cost to the worker.

Why Your DLSE Claim and PAGA Are Not Mutually Exclusive

Filing a DLSE wage claim and sending a PAGA notice are separate processes that can run simultaneously. The DLSE claim recovers unpaid wages directly. The PAGA notice preserves the right to civil penalties and opens the door to contingency fee representation at no cost.

Educational use only. Not legal advice. Justice Foundation.