©2023 Seyfarth Shaw LLP www.seyfarth.com 2023 Cal-Peculiarities | 121 available, however, if the LWDA or its agencies or employees already have cited the employer for a violation of the same section(s) of the Labor Code based on the same facts and theories.437 The California Supreme Court enhanced PAGA’s power still further in 2009, when it held that PAGA authorizes individuals to sue under PAGA without having to satisfy the requirements of a class action, on the rationale that “an action to recover civil penalties ‘is fundamentally a law enforcement action designed to protect the public and not to benefit private parties.’”438 Calculation of PAGA penalties. PAGA vaguely calls for penalties of $100 for each aggrieved employee per pay period for “the initial violation” and $200 for “each aggrieved employee per pay period for each subsequent violation.”439 How does one determine when a “subsequent violation” has occurred? The Court of Appeal has stated that penalties reach $200 per pay period once the employer “has learned its conduct violates the Labor Code.”440 Does this language indicate that until the Labor Commissioner or a court finds a Labor Code violation, the employer can be assessed only the $100 per pay period for an “initial” violation? Or does it indicate that the employer has been notified of a violation—and thus now faces penalties of $200 per pay period—whenever an employee submits a PAGA notice to the LWDA and the employer? The California Supreme Court has yet to clarify the point.441 Anti-retaliation provision. California employers must not retaliate against any employee for bringing a PAGA claim.442 5.15.2 PAGA amendments Reform legislation mitigated certain aspects of PAGA. The principal reform measures were as follows. DLSE exhaustion requirement. Employees challenging certain Labor Code violations must, before suing, give written notice to the LWDA of the specific violation, to enable the LWDA to investigate and cite the employer for the violation, in which case a private lawsuit cannot proceed.443 The LWDA has 60 days to notify the employee that it intends to investigate the alleged violation, in which case a private lawsuit cannot proceed.444 If the LWDA gives notice that it does not intend to investigate or the LWDA does not act with 65 days, then the employee may file a PAGA action.445 For a few specified violations, the employer has an opportunity to cure the violation within a limited time after the employee’s notice.446 A PAGA claim is deficient if the notice to the LWDA and the employer failed to provide sufficient “facts and theories” for the alleged Labor Code violation.447 The Court of Appeal thus held that a PAGA plaintiff who complains of untimely payment of termination wages on behalf of all aggrieved employees cannot proceed if the LWDA notice refers only to the plaintiff’s own situation.448 A 2020 Court of Appeal decision, however, reasoned that the “facts and theories” alleged in an LWDA letter “need not ‘satisfy a particular threshold of weightiness,’” and held that a PAGA plaintiff had adequately exhausted administrative remedies by alleging in his LWDA letter that the employer had knowingly permitted employees to work off the clock, had unlawfully rounded work time, had automatically deducted 30 minutes of pay for meal periods not taken, and had manipulated time to avoid overtime wages.449 Courts have further diminished the significance of PAGA exhaustion requirements by holding that plaintiffs may pursue certain penalties without first contacting the DLSE. These are “statutory penalties” — those that employees could collect directly, pre-PAGA (e.g., waiting-time penalties). These courts would apply the exhaustion requirement only as to “civil penalties,” defined as those penalties that only the Labor Commissioner can collect absent a PAGA action. Courts thus have held that while employees must exhaust LWDA remedies as to any claim for “civil penalties,” employees need not contact the LWDA before suing for “statutory penalties.”450
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