The Private Attorneys General Act (PAGA) has become a significant challenge for California employers, allowing employees to sue on behalf of themselves, their coworkers, and the state for labor law violations. PAGA claims can result in costly penalties and legal fees, making it essential for employers to understand and avoid the mistakes that commonly lead to these claims. In this blog, we’ll cover some of the most common employer mistakes that can trigger PAGA lawsuits and what you can do to protect your business.
- Inaccurate Wage Statements
California labor laws require that wage statements include specific details such as:
- Total hours worked.
- Gross and net wages earned.
- Dates of the pay period.
- Employer name and address.
Even minor errors, like a missing address or inaccurate overtime calculation, can lead to a PAGA claim. Inaccurate wage statements are one of the most common reasons employers face PAGA lawsuits, as they impact all employees and are easy to identify.
How to Avoid It:
Regularly audit your payroll system to ensure all required information is included on wage statements. Work with a labor law expert to ensure compliance with California regulations.
- Misclassifying Employees
Misclassifying employees as independent contractors or exempt employees is a major risk under PAGA. Misclassification can lead to violations related to overtime, meal and rest breaks, and other wage and hour laws.
For example:
- An employee classified as exempt but not meeting the legal criteria may be denied overtime pay.
- Independent contractors may not receive required benefits or protections.
How to Avoid It:
Review employee classifications regularly and ensure they meet the legal standards under California law. When in doubt, consult with a legal expert to avoid missteps.
- Failing to Provide Meal and Rest Breaks
California requires employers to provide:
- A 30-minute unpaid meal break for every five hours worked.
- A 10-minute paid rest break for every four hours worked.
Failing to provide these breaks—or improperly documenting them—can lead to substantial penalties under PAGA. Employees may also file claims if they feel pressured to skip breaks or if breaks are interrupted.
How to Avoid It:
Create clear policies that comply with California’s break requirements and train managers to enforce them consistently. Use time-tracking tools to document breaks accurately.
- Not Paying Overtime Correctly
Overtime pay in California is calculated differently than in many other states. Employees must be paid:
- Time and a half for hours worked over eight in a day or 40 in a week.
- Double time for hours worked over 12 in a day or over eight on the seventh consecutive workday.
Failing to calculate overtime correctly or offering “off-the-clock” work without compensation can result in a PAGA claim.
How to Avoid It:
Ensure your payroll system is set up to comply with California’s specific overtime laws. Conduct regular audits and promptly address any errors brought to your attention.
- Ignoring Workplace Safety Standards
Cal/OSHA standards are in place to protect employees from workplace hazards. Employers who fail to follow these standards—such as providing proper equipment, training, or safety measures—risk PAGA claims tied to unsafe working conditions.
How to Avoid It:
Stay updated on Cal/OSHA requirements and conduct regular safety audits. Encourage employees to report hazards and take their concerns seriously to prevent potential violations.
- Retaliating Against Employees
Employees who raise concerns about labor law violations or participate in PAGA claims are protected from retaliation under California law. Actions like firing, demoting, or disciplining employees in response to complaints can lead to retaliation claims, which are often included in PAGA lawsuits.
How to Avoid It:
Create a culture where employees feel comfortable raising concerns without fear of retaliation. Train managers on anti-retaliation policies and document all disciplinary actions thoroughly to ensure they are not tied to employee complaints.
- Overlooking Proper Recordkeeping
California employers must maintain detailed records of employee hours, wages, and compliance with labor laws. Inadequate recordkeeping or failing to retain records for the required time can make it easier for employees to file PAGA claims.
How to Avoid It:
Implement a robust recordkeeping system that tracks all required data. Ensure records are retained for at least three years, as required by California law.
Why Employers Should Take Proactive Steps
PAGA claims are not just about one mistake—they often stem from systemic issues that affect multiple employees. Because these lawsuits can result in significant financial penalties, employers must take a proactive approach to compliance.
How to Protect Your Business
- Conduct Regular Audits: Review payroll, employee classifications, and workplace policies to ensure compliance with California labor laws.
- Train Managers and Supervisors: Educate your leadership team on labor law requirements to minimize unintentional violations.
- Work With an Employment Law Attorney: Having a legal expert review your policies and practices can help identify risks before they become costly mistakes.
Call Rupal Law for PAGA Defense Assistance
If you’re facing a PAGA claim or want to protect your business from potential lawsuits, Rupal Law is here to help. We specialize in defending California employers and providing guidance to ensure labor law compliance.
Call us today at (951) 460-0830 to schedule a consultation and protect your business from common employer mistakes that lead to costly claims.
