PAGA Enforcers on the Prowl (Part 4 of 5)

This is the fourth part of our five-part series on Why You Should Treat Wage and Hour Compliance Like Safety in California. Part 1 | Part 2 | Part 3 | Part 4 (you’re reading it!) | Part 5.

In Part 1 of this series, we compared health and safety practices with wage and hour compliance, demonstrating how wage and hour lawsuits threaten California employers more due to a lack of administrative or preventative infrastructure.

In Part 2, we shared how wage and hour exposure often involves all your California hourly (non-exempt) employees and includes up to four years of previous violations.

In Part 3, we showed you how wage and hour penalties can add up very quickly for California employers. For example, a single meal period infraction can result in $50, $60, or sometimes even $100 of potential exposure per meal period!

There’s more to this story, though. As we continue our comparison of the health and safety landscape with wage and hour compliance in California, the plot takes a devastating turn for California employers. Read on as we show you exactly how California’s enforcement system for wage and hour compliance pits employees against employers and incentivizes wage and hour lawsuits.

Cal/OSHA: The Health and Safety Enforcement System We All Know and Love

Have you ever experienced this situation? Someone at your workplace (or any workplace) notices a safety violation and jokingly blurts out, “Uh oh. That’s not safe. Somebody call OSHA!”

Here’s the thing: Calling OSHA about a safety violation is not a joke—it’s a real thing that companies fear.

When there is a health and safety violation, people can and often do call Cal/OSHA. Cal/OSHA is California’s health and safety enforcement system. It’s full name is the California Division of Occupational Safety and Health (Cal/OSHA), and it operates under the California Department of Industrial Relations.

Cal/OSHA establishes and enforces California’s health and safety regulations and standards, conducts inspections of workplaces, identifies health and safety violations, issues citations and penalties to employers, and provides training and educational resources to help employers understand and comply with health and safety regulations.

Because of Cal/OSHA and its supporting infrastructure, California employers are very familiar with everything related to health and safety.

What employers don’t realize, however, is that the enforcement system for wage and hour compliance in California is very different from health and safety.

Government Bounty Hunters: California’s Wage and Hour Enforcement System Pits Employees Against Employers

Unlike safety claims that are largely processed through Cal/OSHA’s administrative body, California devised a different system for wage and hour compliance.

The department responsible for enforcing wage and hour compliance is the California Division of Labor Standards Enforcement (DLSE), which is also part of the California Department of Industrial Relations. The DLSE is responsible for ensuring that employers in California comply with state employment laws related to minimum wage, overtime pay, meal and rest breaks, record-keeping, and other aspects of wage and hour compliance.

Thanks to the state’s class action laws and PAGA, however, California’s wage and hour enforcement system is often described as a bounty-hunter system of enforcement because it allows private individuals, such as employees or their representatives, to act as private attorneys general to enforce wage and hour laws on behalf of themselves and others. This is primarily due to the Private Attorneys General Act (PAGA), which allows aggrieved employees to sue their employers for Labor Code violations on behalf of themselves and other employees.

The state has essentially deputized every employee and lawyer in California to bring a civil lawsuit to enforce California’s wage and hour laws! This means any employee and lawyer can team up to bring a penalty enforcement lawsuit against your business on behalf of (most often) a large portion or all your nonexempt hourly employees.

Lawyers and their clients are incentivized to file these lawsuits because they are generally low risk and produce a substantial return through attorneys’ fees and incentive payments to the employees bringing the suit. This has inspired many lawyers to dip their toes in the wage and hour pool, and the increased competition among plaintiffs’ lawyers has caused the class and PAGA stalwarts to be even more aggressive.

While it is tempting to blame employees or their attorneys for the rise in wage and hour lawsuits, California’s system of enforcement and its natural incentives are the true cause.

California employers must not fall into the trap of assuming enforcement of wage and hour compliance is handled the same as health and safety. It’s not. No one is going to call a state agency to report a wage and hour violation. Instead, they are just going to sue you.

Level Up Your Wage and Hour Compliance

California employers must recognize their vulnerability to wage and hour lawsuits and take proactive steps to minimize this risk. Those who have faced such lawsuits know firsthand their considerable financial burden, as well as the time and stress involved. For those yet untouched, the threat inexorably creeps closer. Employers must prioritize wage and hour compliance, crafting robust strategies to navigate the complexities of labor laws and minimize exposure to violations.

One strategy to consider would be emulating the health and safety practices you probably already have in place. For instance, do you train and certify your employees on health and safety? You can and should do the same for wage and hour compliance with our wage and hour training for hourly non-exempt employees and managers in California.

Watch out for these lawsuits, start taking wage and hour compliance seriously, and maybe, just maybe, you can avoid the stress and expense of a wage and hour lawsuit.