The Private Attorneys General Act (PAGA) has been around since 2004, but today it is one of the most active and impactful risks employers across California face, especially in industries like manufacturing, biotech, and hospitality.

But what is it really? PAGA allows employees to file lawsuits against their employers for alleged labor code violations, not just for themselves, but on behalf of the State of California to recover civil penalties. Because employees act as “private attorneys general” to enforce labor laws, the scope of a lawsuit can grow substantially, as can recoveries. It basically deputizes individuals to file lawsuits on behalf of other “aggrieved” employees, serving as a pseudo-class action.

These days, PAGA activity in California has reached historic highs, with more than 9,600 claims filed in the last 12 months, averaging about 27 claims per day. PAGA claims are quite profitable for attorneys who are quick to proactively seek out employees to bring potential violations to their attention. 

Settlements are no joke either. The average total settlement is around $1 million. Even small violations can lead to six- and seven-figure exposure. Think about that. Many claims settle in the $100,000 to $1 million range. And defense costs alone can reach $75,000 to $250,000. 

In fact, the most common violations are infractions that employers may not even be aware they are doing wrong, such as: 

• • Meal and Rest Break Violations
• • Wage Statement Errors
• • Unpaid Overtime and Minimum Wage
• • Unreimbursed Business Expenses
• • Waiting Time Penalties
• • Employee Misclassification
• • Cal/OSHA Safety Violations
  

Even one missed meal break, one inconsistent manager practice, or one outdated policy can quickly multiply across your workforce. Consider the math: PAGA penalties accrue per employee, per pay period, with each violation ranging from $100 to $200. Adding to that, violations are derivative, meaning that penalties can stack on each other because the underpayment is also subject to late penalties.

Because this has attracted some overzealous litigation activity, there are currently PAGA reforms being reviewed to shift focus from punitive lawsuits to early employer remediation. While this might be good news for employers, the updated framework has not yet been finalized, and it does not eliminate PAGA risks and perils.

You’re not alone. But there is something that you, as an employer, can do, and that is to ensure your employment practices are compliant. SDHR Consulting can not only help with this but also help you build best-practice processes to stay proactively compliant. Whether you’re building your HR function for the first time or refining an existing structure, we meet you where you are and help you move forward with clarity and confidence. Contact us today at info@sdhrconsulting.com to learn more.

Because in today’s world, proactive HR isn’t a luxury. It’s a necessity.

Resources: 
Labor & Workforce Development Agency (LWDA) (2025 Filing Data)
Easeworks: PAGA at 20 – California’s Litigation Engine and Its Impact (5/30/26)
GV Wire: California Goes After Vexatious PAGA Law Firms – How much have they cost employers? (4/14/26)