Nicole Rice

Governor signs bill to provide limited PAGA relief regarding wage statements

By Nicole Rice, Policy Director, Government Relations

Capitol Update, Oct. 12, 2015

Governor Brown has signed the CMTA-supported AB 1506 (Roger Hernández, D-West Covina), urgency legislation that will immediately grant employers an opportunity to cure specified technical violations in an itemized wage statement before they can be sued under California’s Private Attorneys General Act (PAGA).

Under Labor Code sections 226(a)(6) and 226(a)(8), employers are required to provide both the inclusive dates of the pay period and the name and address of the employer, respectively, on their employees’ wage statements. AB 1506 will allow an employer 33 days to cure any unintentional technical violation of these requirements that do not result in injury or harm to the employee before an action for civil penalties can be brought under PAGA. The violation will not be considered "cured" however until the employer reissues, from the date of the notice, three-year’s worth of fully-compliant wage statements to all the employees who received the defective ones.

While this may seem like a minor amendment to the law, it represents an important initial step in mitigating the legal impact employers face under PAGA.

Similar efforts to reform PAGA have been unsuccessful in the Legislature prior to Mr. Hernández, Chair of the Assembly Labor and Employment Committee, taking on this limited fix in response to the recent increase in lawsuits in this area. According to legislative committee and floor reports, AB 1506 is in response to concerns over the potential financial windfalls and corresponding burdens on employers from “frivolous litigation regarding technical violations that do not harm or injure the employee.”

AB 1506 had no opposition and received overwhelming bi-partisan support in the Legislature.

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