Please Sen. Hertzberg, Kill PAGA

The California Posse Comitatus Act of 1872, a law straight out of the Wild West, could soon be no more. State Sen. Robert Hertzberg’s press secretary said Hertzberg directed his staff to “take a look into bills that were still on the books that were antiquated or no longer needed. This one definitely fits the bill, and it also happens to be that the senator has a history of supporting or passing laws that minimize unnecessary fines and charges against Californians.” This is great news, Senator. We have something else that’s very familiar and also in desperate need of coming off the books. It’s called the Private Attorney General Act or, more commonly, PAGA. And when it comes to excessive fines, it takes the cake. Civil penalties on PAGA cases are 2,430 times the actual alleged damages. PAGA deputizes “each and every” current and former “aggrieved employee” in California to sue companies on behalf of the state. To prevail, the aggrieved employee need only show that a violation occurred, not that he or she was actually harmed by the violation. Under PAGA, any labor law violation – and California has many; the Labor Law Digest is over 1,100 pages – can be enforced by the deputized employee and their attorney. And the fines can be enormous for minor violations. For example, if your company’s start time is 6:30 a.m. and everyone wants to take lunch at 12 p.m., that means everyone is taking their lunch more than 5 hours past their starting time, in violation of the labor code. That alone could cost a company millions of dollars. If you give an employee a gift card or bonus and they work overtime, if you didn’t add the value of the gift or bonus in their base pay, that means you shorted them in the overtime rate. You could be off by pennies but the penalties could cost you millions. With so many new labor laws being passed each year, it is almost impossible to keep up with. That alone makes any business vulnerable to predatory trial attorneys. You could have a paycheck with the wrong employee ID number or missed comma on a company name and it is a labor law violation that, under PAGA, could cost you millions.  And PAGA suits are increasing. More than 35,000 PAGA notices have gone out since 2004. However, since many PAGA complaints get settled quickly, before the notice goes out, there could have been double the number, or maybe 70,000 PAGA complaints initiated in that span. Law firms have realized this is a huge payday for them and are getting rich at the expense of the employee and employer. Take a look at a recent PAGA lawsuit against Uber. In the end, drivers were paid $1.08 each while the trial attorneys took in over $2.6 million. A recent Detroit Free Press article states that across Michigan, police departments have enlisted civilians to work alongside licensed officers to patrol communities and even assist cops with arrests. But these armed civilians are largely unsupervised. The state agency responsible for police licensing and training is not regulating these reserve officers, and it has no idea how many such unlicensed volunteers there are statewide. This lack of oversight continues despite numerous incidents of questionable or even illegal conduct by reserve officers in recent years. Deputizing employees in California to enforce labor laws is no different than the posse of the Wild West and what is going on in Michigan. Here’s a question: If so many employers are unaware of PAGA, how is it so many employees are? The answer is that trial attorneys are seeking them out. Trial attorneys are throwing picnics in parks, offering referral fees, running ads in Facebook, with promises of a big payday for the employee. Of course, the employee never sees that big payday, only the attorney. Most of the cases are settled in mediation and the trial attorneys’ cut is not negotiable while the penalties and wages owed are. PAGA has created a multi-billion-dollar cottage industry that continues to grow with more complex labor laws. California is the only state with such a law and it is being so severely abused by the trial attorneys that it needs to be repealed. So please, Sen. Hertzberg, since you have a history of supporting laws that eliminate unnecessary fines against Californians, take a look at killing PAGA. Tom Manzo is founder and president of California Business & Industrial Alliance, a pro-business organization in Sunland that has sued the state, claiming that PAGA is unconstitutional.