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$10 Billion in Settlements: California’s PAGA Law Under Fire as Businesses Push for Reforms, Governor Newsom Seeks Middle Ground!

(PHOTO: The Labor & Employment Law Blog)

PAGA Lawsuits Cost California Businesses Over $10 Billion in the Past Decade

$200 Million in Penalties Collected Last Year Under PAGA, Sparking Reform Talks

According to Bloomberg Invest, Governor Gavin Newsom is currently leading important negotiations to change California’s Private Attorneys General Act (PAGA) a law that has allowed employees to sue their employers for breaking labor laws. This law has led to big companies like Uber, Google, and Walmart paying millions of dollars in settlements over the past two decades. While PAGA has been valuable for protecting workers’ rights businesses say it has cost them over $10 billion in the last ten years. Business groups and the California Labor Federation are now working together to find a compromise on PAGA by June 27. They hope to avoid a public vote in November that could repeal the law. Businesses argue that PAGA causes too many costly lawsuits and want to change it so that the state enforces labor laws instead of relying on civil suits.

PAGA is seen as essential by labor advocates because it allows workers to challenge workplace violations even if they are forced into arbitration agreements that prevent them from suing. These agreements often keep workers from bringing their grievances to court. Because of PAGA workers have been able to bypass these restrictions and file lawsuits leading to significant settlements and penalties for companies. In the last fiscal year PAGA cases brought in over $200 million in penalties. Labor leaders agree that some minor changes to PAGA might be needed but they want to keep the law’s main function which helps workers get around forced arbitration and hold employers accountable for breaking labor laws.

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$10 Billion in Settlements: California’s PAGA Law Under Fire as Businesses Push for Reforms, Governor Newsom Seeks Middle Ground! (PHOTO:

Governor Newsom Mediates Talks to Balance Worker Rights and Business Interests in PAGA Reform Efforts

Governor Newsom is working to find a middle ground on California’s Private Attorneys General Act (PAGA) which allows workers to sue employers for breaking labor laws. He wants to address business concerns about high costs from frequent lawsuits while keeping strong protections for workers. Businesses have already spent over $31 million to push for a vote to repeal PAGA in November. Newsom hopes to avoid this by reaching a deal that lowers costs for businesses but still lets workers use PAGA to report violations. The results of these talks will affect both worker rights and the business environment in California.

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