Gov. Gavin Newsom has introduced proposed legislation to overhaul the California Private Attorneys’ General Act and provide significant relief for employers, Fisher Phillips’ Insight System reports.

If passed, the reform will limit the types of employees who can bring claims, allow employers more opportunities to correct mistakes, reduce penalties, and streamline procedures to cut down on court claims.

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The proposal, detailed in Assembly Bill 2288 and Senate Bill 92, follows discussions among the Newsom Administration, labor advocates, and business groups.

Lawmakers Racing to Finish Legislation

The urgency stems from a PAGA-related proposition that could appear on the November 2024 ballot, potentially repealing the law entirely. Lawmakers are trying to pass the compromise bill before Thursday’s deadline to withdraw the ballot proposition.

The 10 key provisions of the proposed reform include reducing penalties, clarifying when heightened penalties apply, and offering new cure processes for violations.

The legislation also seeks to limit standing for PAGA claims, empower courts to limit the scope, and preclude certain derivative penalties. Small and large employers will have different processes to cure violations, and the new rules will not apply retroactively.

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Employers are advised to monitor the progress of the legislation and prepare to implement “reasonable steps” to comply with the new requirements. This includes updating handbooks, conducting audits, and training employees. Legal counsel should be consulted to ensure compliance.

Read more at Fisher Phillips’ Insight System.