Legislation that would undermine the 2024 reforms to the Private Attorneys General Act (PAGA) cleared the California Senate Appropriations Committee on May 23, threatening to undo key protections for employers.

Senate Bill 310, introduced by Sen. Scott Wiener, D-San Francisco, would establish a new private right of action for wage and hour claims. Critics, including the Fresno Chamber of Commerce, the California Chamber of Commerce, and a broad coalition of business advocates, believe this bill would reopen the door to litigation abuse and increased costs for employers.

The 2024 bipartisan agreement between business and labor organizations was designed to address widespread concerns about excessive lawsuits and high legal costs associated with PAGA. Prior to the reforms, the law had been criticized for encouraging legal actions that generated substantial attorney fees while offering minimal compensation to workers.

Originally enacted in 2004, PAGA quickly led to a dramatic increase in litigation. By 2014, the California Labor and Workforce Development Agency was receiving roughly 4,000 PAGA notices each year. Claims filed under the pre-reform PAGA framework typically took twice as long to resolve and provided workers about one-third of the compensation they would have obtained through claims handled by state regulators.

With SB 310 now moving forward, stakeholders are voicing concerns that the measure could reverse progress made under the 2024 reforms, potentially increasing litigation abuse and raising costs for employers.

A letter co-authored by the California Chamber of Commerce, Western Growers Association, California Restaurant Association, California Retailers Association and many other businesses associations and chambers of commerce cautions, “SB 310 would create a new private right of action for penalties under Labor Code section 210. Those penalties would apply to nearly every claim pled in a typical wage and hour case, and disregards any good faith efforts made by an employer to comply. SB 310 undermines last year’s reforms.”

For more information from the California Chamber of Commerce on the issue, click here.