California employers face unique challenges under the Private Attorneys General Act (PAGA). This law allows employees to file lawsuits for labor code violations, often resulting in costly penalties and extensive litigation. Receiving a PAGA claim can feel overwhelming, but how you respond can make all the difference. In this blog, we will walk you through what to do if you receive a PAGA claim in California and provide tips on how to minimize its impact on your business.
Understanding PAGA Claims
PAGA allows employees to sue employers on behalf of themselves, coworkers, and the state of California for labor violations. Common violations include:
• Failure to provide meal and rest breaks.
• Inaccurate wage statements.
• Unpaid wages or overtime.
• Employee misclassification.
Penalties can quickly add up, as they apply per employee per pay period. For this reason, PAGA claims are a significant legal and financial risk for California employers.
Steps to Take When You Receive a PAGA Claim
1. Take the Claim Seriously
PAGA claims are not minor infractions—they can result in substantial penalties, legal fees, and reputational damage. Address the claim promptly and thoughtfully.
2. Contact an Employment Law Attorney Immediately
Engage a skilled employment attorney as soon as possible. They can:
• Assess the validity of the claim.
• Identify any potential defenses.
• Guide you through each step of the response process.
Delaying legal representation can lead to missteps that weaken your defense.
3. Understand the Claim
Review the details of the claim, which typically comes in the form of a notice of intent to file. Employees are required to notify the Labor and Workforce Development Agency (LWDA) and the employer of the alleged violations before filing a lawsuit. Work with your attorney to evaluate:
• Which labor code violations are alleged.
• The scope of the claim (e.g., does it affect a single employee or a group?).
• The evidence supporting the claim.
Understanding the specifics will help you craft an appropriate response.
4. Gather Relevant Documentation
Collect all records related to the claim, such as:
• Payroll and timekeeping records.
• Meal and rest break logs.
• Employee handbooks and policies.
• Communication between the employee and management regarding the alleged violations. Accurate and complete records can significantly strengthen your defense.
5. Respond to the LWDA Notice
You have 65 days from the date of the LWDA notice to respond. This is your chance to:
• Correct any alleged violations.
• Provide documentation showing compliance.
• Pay any owed penalties to avoid further action.
Your attorney can help draft and submit a comprehensive response to the LWDA.
6. Correct Any Identified Violations
If legitimate violations are identified, take immediate action to correct them. This may involve updating policies, providing additional training, or issuing back pay. Corrective action demonstrates good faith and may reduce penalties.
7. Evaluate Settlement Options
Many PAGA claims are resolved through settlements to avoid the time, cost, and uncertainty of litigation. While settlement may seem costly upfront, it is often the most practical solution. Work with your attorney to negotiate a fair agreement.
8. Prepare for Litigation (if necessary)
If settlement is not an option, be prepared to defend the claim in court. This involves:
• Developing a legal strategy with your attorney.
• Identifying witnesses and gathering evidence.
• Presenting a strong case to challenge the validity of the claim.
Litigation can be lengthy and expensive, but a well-prepared defense can minimize the impact on your business.
Proactive Steps to Prevent Future Claims
Once you’ve addressed the current claim, use the experience as an opportunity to improve your compliance practices and prevent future issues. Consider the following:
• Conduct regular audits of payroll, timekeeping, and labor policies.
• Train managers on California labor laws and employee rights.
• Encourage open communication with employees to address concerns before they escalate.
Taking proactive steps not only reduces legal risks but also fosters a positive workplace culture.
Call Rupal Law for Employment Law Defense
Receiving a PAGA claim can be stressful, but you don’t have to face it alone. The experienced attorneys at Rupal Law are here to protect your business and guide you through every step of the process.
Call us today at (951) 460-0830 for assistance with PAGA claims or other employment law defense needs. Let us help you resolve the claim and safeguard your business against future legal challenges.
