In California, wage and hour laws are strict, and businesses must follow them carefully. One of the things many employers and business owners should know about is, “How to Handle PAGA Claims Related to Overtime and Wage Violations.”

 

One of the most common ways employers get into legal trouble is through violations related to overtime and wages. If these violations occur, it can lead to a lawsuit under the Private Attorneys General Act (PAGA). This can be costly and time-consuming, so it’s important for employers to know how to prevent and handle these claims when they arise.

 

Let us share what PAGA is, how wage and overtime violations can lead to a PAGA claim, and what steps employers should take to protect themselves.

 

 

What is PAGA?

 

The Private Attorneys General Act (PAGA) is a California law that allows employees to file lawsuits on behalf of themselves and other employees for labor law violations. Essentially, PAGA turns employees into “deputized” state labor enforcers. This law was created because the state of California doesn’t have enough resources to investigate every labor violation. Under PAGA, if an employer violates certain labor codes, employees can sue to recover penalties.

 

These penalties can add up quickly, especially if many employees are involved in the claim. That’s why employers need to be vigilant about complying with California wage and hour laws.

 

Common Overtime and Wage Violations Leading to PAGA Claims

Wage and overtime issues are among the top reasons employees file PAGA claims. Here are the most common violations:

 

1. Failure to Pay Overtime Properly:
   • California’s overtime rules are strict. Employers must pay employees 1.5 times their regular rate of pay for any hours worked over 8 in a day or 40 in a week. Double time must be paid for any hours worked over 12 in a day. Failing to pay the correct rate can lead to a PAGA claim.
2. Misclassification of Employees:
   • Some employers wrongly classify employees as exempt from overtime pay. If an employee is misclassified as exempt when they should be non-exempt, they may not be getting paid for overtime they’re entitled to, opening the door for a PAGA lawsuit.
3. Meal and Rest Break Violations:
   • California law requires employers to provide meal breaks and rest breaks to employees. If an employer does not give these breaks or fails to properly compensate employees who work through their breaks, it can lead to a claim under PAGA.
4. Off-the-Clock Work:
   • Employees must be paid for all hours worked. If employees are required to work before clocking in, after clocking out, or during breaks without being compensated, it can result in a wage violation and a PAGA claim.
5. Failure to Provide Accurate Wage Statements:
   • Employers are required to provide employees with accurate wage statements. If wage statements are missing key information (such as hours worked, pay rate, or deductions), or if they are inaccurate, employees can file a PAGA claim.

 

How Overtime Violations Play Into PAGA Lawsuits

 

Overtime violations are particularly problematic because they often involve multiple employees, increasing the scope of the claim. For example, if an employer consistently fails to pay overtime properly, all employees affected by this violation can be included in a PAGA claim.

 

Additionally, California’s labor laws require that overtime be paid on both a daily and weekly basis. This means employers must track hours carefully to ensure employees are getting the correct pay. Employers who fail to keep accurate records can face even steeper penalties if they can’t provide proof of compliance during a PAGA lawsuit.

 

PAGA claims related to overtime often focus on:

• Employees who weren’t compensated for overtime hours.
• Inaccurate timekeeping practices.
• Misclassified employees not receiving overtime pay.

 

Because PAGA allows employees to act on behalf of the state, a single overtime violation can quickly escalate into a much larger legal and financial issue.

 

Steps to Handle PAGA Claims for Overtime and Wage Violations

 

If your company is hit with a PAGA claim, here are the steps you should take to protect your business:

 

1. Consult with an Employment Attorney Immediately

The first thing you should do is contact an experienced employment law defense attorney. PAGA claims are complex, and an attorney can guide you through the process, help you understand your rights, and develop a strategy to defend against the claim. Call Rupal Law to schedule a consultation at (951) 460-0830.

 

2. Review Your Wage and Hour Practices

Thoroughly audit your payroll, timekeeping, and overtime practices to identify any issues that could be contributing to the claim. Look for:

• Misclassification of employees.
• Inaccurate time records.
• Mistakes in overtime pay.

By identifying the root causes of the claim, you can make necessary changes to prevent future violations.

 

3. Fix Any Ongoing Violations

If you discover any wage or overtime violations, fix them immediately. This may involve reclassifying employees, paying back wages, or updating your payroll practices. Correcting the issue quickly can minimize potential penalties and demonstrate good faith during settlement discussions.

 

4. Negotiate a Settlement

Many PAGA claims are resolved through settlements rather than lengthy court battles. Your attorney can negotiate with the employee’s legal team to reach a settlement that limits your financial exposure. Settling early can save both time and money.

 

5. Implement Preventative Measures

After resolving the claim, focus on prevention. Train your HR team and managers on California’s wage and hour laws, especially regarding overtime and employee classification. Regularly audit your payroll practices to ensure ongoing compliance.

 

Preventing Future PAGA Claims

 

The best way to handle PAGA claims is to prevent them from happening in the first place. Here’s how employers can stay compliant with California’s wage and hour laws:

• Regularly review employee classifications to ensure that exempt and non-exempt employees are correctly categorized.
• Keep accurate time records and ensure employees are paid for all hours worked, including overtime.
• Provide required meal and rest breaks and compensate employees if they work through them.
• Issue detailed and accurate wage statements with each paycheck.

 

By taking these proactive steps, employers can reduce the risk of wage and overtime violations that could lead to costly PAGA claims.

 

Need Legal Defense for Your Wage and Hour Violations?

 

Overtime and wage violations are one of the most common reasons for PAGA lawsuits. To protect your business, it’s critical to stay compliant with California labor laws and handle PAGA claims carefully when they arise. By taking the right steps, and correcting any violations, you can minimize the financial and legal risks associated with these claims. Call Rupal Law today to speak to a California Employment Law Defense Lawyer at (951) 460-0830.