Photo via Adobe Stock | PAGA: Since the pandemic, PAGA filings have increased 47% from 3,472 in 2020 to 5,117 in 2023.

Now in law for 20 years, the Private Attorneys General Act of 2004, commonly referred to as PAGA, is a statute that authorizes aggrieved employees to bring civil suites against their employees for labor code violations on behalf of themselves, other employees, and the State of of California.

Enacted because of low staffing levels for state labor law enforcement, the California Legislature determined that it would be in public’s interest to provide that aggrieved employees be allowed to act as private attorneys general and collect civil penalties for labor code violations.

Though it may have been drafted with good intentions, PAGA has been described as a dangerous bane by owners in the business community.

According to the data for PAGA notices filed with the California Labor and Workforce Development Agency, filings shot up during the pandemic, and are not showing signs of slowing down.

The number of filings went from 3,472 in 2020 to 5,117 in 2023, a 47% increase in the three-year period.

Tom Manzo is the founder and president of the California Business & Industrial Alliance (CABIA), a onprofit organization established in 2017 aiming to changing the labor laws in the state, including regulations like PAGA.

Manzo is also the former COO of Timely, a steel door frames manufacturer in Pacoima, California, which had been hit with approximately $1 million PAGA suite over late lunches, which the company had to pay.

During the lawsuit, Manzo said he realized that the 1,000+ pages of California labor law are used as a tool to file ridiculous claims against hardworking businesses, urging him to be a voice for California business and help them navigate California business regulations.

First, Manzo organized businesses together to start a trade group, and in their conversations with eachother, it was realized that people need help to understand the laws and stay in compliance.

He said many businesses, especially small and mid-sized companies, might not have a designated human resources person, or might not understand based on reading the laws online.

“Based on my experience, even if you have good lawyers and consultants, you’re still not getting right answers,” Manzo said. “We realized there was a need to help the community.”

CABIA has structured their nonprofit with a division of their trade organization, such as CABIA H.R., which focuses on wage and hour audits, where they ensure that their members and clients are as close to compliance as possible.

He said CABIA aims to be offer affordable services to businesses that might come at high fees that could be too costly for smaller businesses, and to stop lawsuits against them.

“We stop some of these lawsuits while we are advocating for change,” Manzo said.

Another lawsuit that many small businesses get hit with revolve around wrongful termination, which could become very expensive, he said.

He said there has been a slew of laws that have gone into effect in the last two years, including businesses being required to update their handbook, bereavement and sick time leave changes, which apply to anyone with employees.

It could be hard to keep up with every new law that goes into effect each year, Manzo said.

“Everybody and their brother is getting hit with lawsuits because it’s so easy for an employee to walk in and file a lawsuit against their employer,”

CABIA works with business owners just starting out, expanding into California, or bought a business, and might not have any ideas about what laws are enforced in the state, Manzo said.

Many non-English speaking business owners also have trouble understanding the laws and staying in compliance with all the different rules that come along when you have even a few employees.

He said CABIA and its members will stay busy campaigning for change, sharing the experiences of its members, and send out weekly updates to its approximately 25,000 online viewers, many of which are legislators or legislative aides.

“We are trying to grow the voice so people can really understand what’s going on,” he said.