Gov. Gavin Newsom signed a landmark reform of the Private Attorneys General Act on Monday, in an attempt to balance the interests of both business and labor groups.

The legislation, developed over several years, aims to strengthen worker protections, encourage employer compliance, simplify litigation, and avoid a controversial ballot measure.

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“This reform is decades in the making — and it’s a big win for both workers and businesses. It streamlines the current system, improves worker protections, and makes it easier for businesses to operate. I want to thank labor and business groups for coming together to hammer out this deal, and our legislative partners for getting these bills to my desk,” said Newsom in a news release.

The reform, encapsulated in AB 2288 authored by Assemblymember Ash Kalra (D-San José) and SB 92 authored by Sen. Tom Umberg (D-Santa Ana), comes after the withdrawal of the PAGA ballot initiative by its proponents last week.

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Key Provisions of the PAGA Reform

Reforming Penalty Structures

• Encourages labor law compliance by capping penalties for employers who promptly address violations and rectify policies after receiving a PAGA notice, and those who proactively comply with labor codes.
• Introduces higher penalties for employers acting maliciously, fraudulently, or oppressively.
• Increases the share of penalty money allocated to employees from 25% to 35%.

Reducing and Streamlining Litigation

• Expands curable Labor Code sections, reducing litigation and enabling quicker resolution for employees.
• Protects small employers with a more robust right-to-cure process through the Labor and Workforce Development Agency (LWDA).
• Codifies that courts may limit the scope of claims presented at trial for better case management.

Improving Measures for Injunctive Relief and Standing

• Grants courts the authority to compel businesses to implement workplace changes to remedy labor law violations.
• Requires that employees personally experience the violations they allege in their claims.

Strengthening State Enforcement

• Empowers the Department of Industrial Relations to expedite hiring and fill vacancies, ensuring effective and timely enforcement of employee labor claims.