California Labor Code 2699 PAGA
The California Labor Code Private Attorneys General Act of 2004 (PAGA), Lab. Code, § 2699, authorizes an aggrieved employee to bring a civil action, on behalf of himself or herself and other current or former employees, to recover civil penalties for violations of any section of the California Labor Code that provides for assessment and collection of civil penalties by the California Labor and Workforce Development Agency or any of its departments or divisions.
California Labor Code 2699 includes:
- Recovery of civil penalty for Labor Code violation through civil action brought by aggrieved employee;
- Amount of penalty;
- Attorney’s fees and costs;
- Limitations; Distribution of penalties recovered;
- Provision of specified items to agency;
- Approval of settlement by superior court;
- Applicability; Regulation
On this page, you will learn about:
- The Statutory Language
- How California courts applied the statute
Labor Code 2699 Statutory Language
(a) Notwithstanding any other provision of law, any provision of this code that provides for a civil penalty to be assessed and collected by the Labor and Workforce Development Agency or any of its departments, divisions, commissions, boards, agencies, or employees, for a violation of this code, may, as an alternative, be recovered through a civil action brought by an aggrieved employee on behalf of himself or herself and other current or former employees pursuant to the procedures specified in Section 2699.3.
(b) For purposes of this part, “person” has the same meaning as defined in Section 18.
(c) For purposes of this part, “aggrieved employee” means any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.
(d) For purposes of this part, “cure” means that the employer abates each violation alleged by any aggrieved employee, the employer is in compliance with the underlying statutes as specified in the notice required by this part, and any aggrieved employee is made whole. A violation of paragraph (6) or (8) of subdivision (a) of Section 226 shall only be considered cured upon a showing that the employer has provided a fully compliant, itemized wage statement to each aggrieved employee for each pay period for the three-year period prior to the date of the written notice sent pursuant to paragraph (1) of subdivision (c) of Section 2699.3.
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(1) For purposes of this part, whenever the Labor and Workforce Development Agency, or any of its departments, divisions, commissions, boards, agencies, or employees, has discretion to assess a civil penalty, a court is authorized to exercise the same discretion, subject to the same limitations and conditions, to assess a civil penalty.
(2) In any action by an aggrieved employee seeking recovery of a civil penalty available under subdivision (a) or (f), a court may award a lesser amount than the maximum civil penalty amount specified by this part if, based on the facts and circumstances of the particular case, to do otherwise would result in an award that is unjust, arbitrary and oppressive, or confiscatory.
(f) For all provisions of this code except those for which a civil penalty is specifically provided, there is established a civil penalty for a violation of these provisions, as follows:
(1) If, at the time of the alleged violation, the person does not employ one or more employees, the civil penalty is five hundred dollars ($500).
(2) If, at the time of the alleged violation, the person employs one or more employees, the civil penalty is one hundred dollars ($100) for each aggrieved employee per pay period for the initial violation and two hundred dollars ($200) for each aggrieved employee per pay period for each subsequent violation.
(3) If the alleged violation is a failure to act by the Labor and Workplace Development Agency, or any of its departments, divisions, commissions, boards, agencies, or employees, there shall be no civil penalty.
(1) Except as provided in paragraph (2), an aggrieved employee may recover the civil penalty described in subdivision (f) in a civil action pursuant to the procedures specified in Section 2699.3 filed on behalf of himself or herself and other current or former employees against whom one or more of the alleged violations was committed. Any employee who prevails in any action shall be entitled to an award of reasonable attorney’s fees and costs, including any filing fee paid pursuant to subparagraph (B) of paragraph (1) of subdivision (a) or subparagraph (B) of paragraph (1) of subdivision (c) of Section 2699.3. Nothing in this part shall operate to limit an employee’s right to pursue or recover other remedies available under state or federal law, either separately or concurrently with an action taken under this part.
(2) No action shall be brought under this part for any violation of a posting, notice, agency reporting, or filing requirement of this code, except where the filing or reporting requirement involves mandatory payroll or workplace injury reporting.
(h) No action may be brought under this section by an aggrieved employee if the agency or any of its departments, divisions, commissions, boards, agencies, or employees, on the same facts and theories, cites a person within the timeframes set forth in Section 2699.3 for a violation of the same section or sections of the Labor Code under which the aggrieved employee is attempting to recover a civil penalty on behalf of himself or herself or others or initiates a proceeding pursuant to Section 98.3.
(i) Except as provided in subdivision (j), civil penalties recovered by aggrieved employees shall be distributed as follows: 75 percent to the Labor and Workforce Development Agency for enforcement of labor laws, including the administration of this part, and for education of employers and employees about their rights and responsibilities under this code, to be continuously appropriated to supplement and not supplant the funding to the agency for those purposes; and 25 percent to the aggrieved employees.
(j) Civil penalties recovered under paragraph (1) of subdivision (f) shall be distributed to the Labor and Workforce Development Agency for enforcement of labor laws, including the administration of this part, and for education of employers and employees about their rights and responsibilities under this code, to be continuously appropriated to supplement and not supplant the funding to the agency for those purposes.
(k) Nothing contained in this part is intended to alter or otherwise affect the exclusive remedy provided by the workers’ compensation provisions of this code for liability against an employer for the compensation for any injury to or death of an employee arising out of and in the course of employment.
(1) For cases filed on or after July 1, 2016, the aggrieved employee or representative shall, within 10 days following commencement of a civil action pursuant to this part, provide the Labor and Workforce Development Agency with a file-stamped copy of the complaint that includes the case number assigned by the court.
(2) The superior court shall review and approve any settlement of any civil action filed pursuant to this part. The proposed settlement shall be submitted to the agency at the same time that it is submitted to the court.
(3) A copy of the superior court’s judgment in any civil action filed pursuant to this part and any other order in that action that either provides for or denies an award of civil penalties under this code shall be submitted to the agency within 10 days after entry of the judgment or order.
(4) Items required to be submitted to the Labor and Workforce Development Agency under this subdivision or to the Division of Occupational Safety and Health pursuant to paragraph (4) of subdivision (b) of Section 2699.3, shall be transmitted online through the same system established for the filing of notices and requests under subdivisions (a) and (c) of Section 2699.3.
(m) This section shall not apply to the recovery of administrative and civil penalties in connection with the workers’ compensation law as contained in Division 1 (commencing with Section 50) and Division 4 (commencing with Section 3200), including, but not limited to, Sections 129.5 and 132a.
(n) The agency or any of its departments, divisions, commissions, boards, or agencies may promulgate regulations to implement the provisions of this part.
PAGA Does Not Require Individualized Penalty Inquiry
California’s Private Attorneys General Act of 2004 does not require individualized penalty inquiries that would defeat the commonality or predominance requirements for purposes of class certification. Brown v. Wal-Mart Stores, Inc. (9th Cir. Cal. June 8, 2016), 651 Fed. Appx. 672.
Meal Period & Minimum Wage Basis for PAGA
Meal period and minimum wage violations provided a basis for Private Attorneys General Act civil penalties. Kaanaana v. Barrett Business Services, Inc., Cal. App. 2d Dist. Nov. 30, 2018), 240 Cal. Rptr. 3d 636.
Constitutionality of PAGA
United States District Court for the Northern District of California declines to find that the California Labor Code Private Attorney General Act is unconstitutional on separation of powers grounds for usurping the California judiciary’s ability to regulate attorney conduct. Willner v. Manpower Inc. (N.D. Cal. May 3, 2012), 2012 U.S.Dist. LEXIS 62227.
Where employer argued that employee’s claim under Private Attorney General Act (PAGA) was pled as a representative action, rather than a class action, under the PAGA, an aggrieved employee was any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed. Under that definition, and the class definition included in the first amended complaint, aggrieved employees and class members were one and the same. Davenport v. Wendy’s Co. (E.D. Cal. July 25, 2014), 2014 U.S. Dist. LEXIS 103058.
Because workers alleging labor law violations failed to plead compliance with the pre-filing notice and exhaustion requirements in Lab C, § 2699.3(a), they were not entitled to pursue causes of action alleging violations of provisions listed in Lab C, § 2699.5, and seeking civil penalties under Lab C, § 2699.
Caliber Bodyworks, Inc. v. Superior Court (Cal. App. 2d Dist. Nov. 23, 2005), 134 Cal. App. 4th 365;
Overruled in part, ZB, N.A. v. Superior Court (Cal. Sept. 12, 2019), 252 Cal. Rptr. 3d 228, 448 P.3d 239.
No Assignment of PAGA Claims
Individual’s statutory right to sue in a representative capacity, conferred under the California Labor Code Private Attorneys General Act of 2004 (PAGA), Lab C § 2699, and under the unfair competition law, B & P C § 17203, may not be assigned to a third party. Because the purported assignor (the employee), although authorized by B & P C § 17203 or PAGA to bring an action on behalf of others, has no ownership interest in the causes of action owned by others, the employee necessarily has no right to transfer those causes of action to a third party. Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court, (2009) 46 Cal. 4th 993.
PAGA and Arbitration Contracts
Where employer sought to enforce arbitration agreement with former employee, employee’s claim under Private Attorneys General Act of 2004 belonged primarily to State, and right to bring it could not be waived by contract to resolve private disputes and should not be submitted to arbitration. Valdez v. Terminix Int’l Co. Ltd. P’ship (C.D. Cal. July 14, 2015), 2015 U.S. Dist. LEXIS 92177, rev’d, in part, (9th Cir. Cal. Mar. 3, 2017), 681 Fed. Appx. 592, 2017 U.S. App. LEXIS 3881.
Requiring arbitration agreements to allow for representative Private Attorneys General Act (PAGA) claims on behalf of other employees under Lab C § 2699(a) would be inconsistent with the Federal Arbitration Act (FAA), 9 USCS §§ 1 et seq.; the California Court of Appeal’s decision in Franco shows only that a state might reasonably wish to require arbitration agreements to allow for collective PAGA actions, but the U.S. Supreme Court’s decision in AT&T v. Concepcion makes clear that the state cannot impose such a requirement because it would be inconsistent with the FAA. Quevedo v. Macy’s, Inc. (C.D. Cal. June 16, 2011), 798 F. Supp. 2d 1122, 2011 U.S. Dist. LEXIS 83046.
Stay PAGA for Arbitration Determination
In proceedings seeking to compel arbitration, the trial court did not err in denying a stay of both an employee’s claims against nonsignatories who were not entitled to compel arbitration and a Private Attorneys General Act (PAGA) claim seeking recovery of civil penalties because a stay was not necessary to prevent inconsistent determinations and the PAGA claim, brought on the state’s behalf, did not belong to the employee individually. Jarboe v. Hanlees Auto Group (Cal. App. 1st Dist. Aug. 14, 2020), 53 Cal. App. 5th 539.
Employee Waiving PAGA Not Valid
Because an employee’s representative action under Lab C § 2699 alleging Labor Code violations was an action to protect the public, it did not conflict with the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1 et seq., and the FAA did not preempt a finding that a representative action waiver in an arbitration provision was unenforceable for public policy reasons in accordance with CC § 3513. Brown v. Ralphs Grocery Co. (Cal. App. 2d Dist. July 12, 2011), 197 Cal. App. 4th 489.
Employees’ purported waiver of Private Attorney General Act representative claims was unenforceable under California Supreme Court precedent, which remained valid because the United States Supreme Court had not decided the same question differently. Arbitration could not be compelled because the state, as the real party in interest, had not consented to arbitration and had not waived its right to bring its claim to court. Correia v. NB Baker Electric, Inc. (Cal. App. 4th Dist. Feb. 25, 2019), 244 Cal. Rptr. 3d 177, 32 Cal. App. 5th 602, 2019 Cal. App. LEXIS 150.
Motion to compel arbitration pursuant to an employment agreement was denied because a California Labor Code Private Attorneys General Act (PAGA), Lab C §§ 2698-2699, arbitration waiver contradicted the fundamental purpose of a representative enforcement action under the PAGA, and the waiver was unconscionable. The U.S. Supreme Court’s AT&T decision did not require a contrary conclusion and the Federal Arbitration Act was not frustrated by refusing to enforce the waiver. Urbino v. Orkin Servs. of Cal. (C.D. Cal. Oct. 5, 2011), 882 F. Supp. 2d 1152.
Class Action Waiver as to PAGA
Class action waiver in an arbitration agreement was unenforceable as a violation of public policy under CC §§ 1668, 3513, as applied to a claim under the Labor Code Private Attorneys General Act (PAGA), Lab C §§ 2698 et seq., because the PAGA claim served public purposes and could proceed only as a representative action in the absence of an agency action pursuant to Lab C §§ 2699, 2699.3. Brown v. Superior Court (Cal. App. 6th Dist. June 4, 2013), 216 Cal. App. 4th 1302.
Employers Failure to Provide Seats for Employee
Employee could state a cause of action against her employer for civil penalties under Lab C § 2699 based on the employer’s failure to comply with the suitable seating requirement set forth in Wage Order No. 7-2001, subd 14 (8 Cal Code Reg § 11070(14)). Bright v. 99¢ Only Stores (Cal. App. 2d Dist. Nov. 12, 2010), 189 Cal. App. 4th 1472.
Trial court erred in decertifying a class action that sought penalties based on an employer’s alleged failure to provide seats to cashiers; in finding that individual issues would predominate because cashiers at different stores had a variety of tasks, the trial court improperly reached the merits. Whether the employer had a policy requiring cashiers to stand, and whether the nature of check-out work would reasonably permit the use of seats, were questions subject to common proof. Hall v. Rite Aid Corp. (Cal. App. 4th Dist. May 2, 2014), 226 Cal. App. 4th 278.
Complaint for PAGA Action and Class Action
Trial court did not abuse its discretion in approving a settlement of two class action lawsuits against an employer that did not allocate any damages to the class’s civil penalty claims under the Private Attorneys General Act of 2004. Such claims were resolved as a part of the overall settlement of the case. Nordstrom Com. Cases (Cal. App. 4th Dist. June 10, 2010), 186 Cal. App. 4th 576.
Employee was not required to certify a class before summary judgment was granted with respect to her Private Attorney General Act (PAGA) claim where the majority view was that the PAGA claims were not class actions, and there was no standing issue precluding the employee from pursuing the claim given its status as a law enforcement action. McKenzie v. Fed. Express Corp. (C.D. Cal. Apr. 14, 2011), 765 F. Supp. 2d 1222.
PAGA vs FRCP 23
Since the Private Attorney General Act is a law enforcement action, and not a class action, there is no conflict with Fed. R. Civ. P. 23. Cardenas v. McLane Foodservice, Inc. (C.D. Cal. Jan. 31, 2011), 2011 U.S. Dist. LEXIS 13126.
Class action requirements need not be met when an employee’s representative action against an employer is seeking civil penalties under the Private Attorneys General Act of 2004, Lab C §§ 2698 et seq. Accordingly, in a case in which an employee sought, among other things, civil penalties under the Act for himself and other employees of his former employer, a court of appeal did not err in holding that the representative claims under the Act were not subject to class action requirements and should not have been stricken by a trial court. Arias v. Superior Court (Cal. June 29, 2009), 46 Cal. 4th 969.
Although the employers argued that the employee’s allegations under the California Private Attorney General Act (PAGA), Lab C §§ 2698 et seq., should have been stricken for failure to satisfy the requirements of Fed. R. Civ. P. 23, the court found that the employers’ motion to strike the employee’s PAGA allegations should have been denied because although the employee’s “aggrieved employees” description may have been overly broad, if the employee could prove the employers violated the PAGA with respect to all the employees described in the complaint as “aggrieved employees,” the employee would be able to argue that civil penalties were appropriate under the PAGA, and if the employee could not prove such violations, no penalties would be assessed under the PAGA. Hibbs-Rines v. Seagate Techs., LLC (N.D. Cal. Mar. 2, 2009), 2009 U.S. Dist. LEXIS 19283.
In accordance with Lab C, § 2699(a), plaintiffs seeking civil penalties recoverable by the state in suits for violations of any California Labor Code provision specified in Lab C, § 2699.5, must plead compliance with the administrative procedures of Lab C, § 2699.3(a). Caliber Bodyworks, Inc. v. Superior Court (Cal. App. 2d Dist. Nov. 23, 2005), 134 Cal. App. 4th 365.
In an action alleging labor law violations arising from an employer’s failure to comply with a living wage ordinance, employees could recover penalties under Lab C § 2699(g) because their amendment of their complaint to allege such claims after the statute granted them standing was not a retroactive application of the statute and related back to their original complaint. Amaral v. Cintas Corp. No. 2 (Cal. App. 1st Dist. June 11, 2008), 163 Cal. App. 4th 1157.
Employee was bound by judicial admission in the complaint that the employers provided meal periods after a certain date, despite the trial court’s finding that the facts conflicted with that admission. Thurman v. Bayshore Transit Management, Inc. (Cal. App. 4th Dist. Feb. 27, 2012), 203 Cal. App. 4th 1112.
Union Has No Standing
Unions lacked standing under the Private Attorneys General Act of 2004, Lab C §§ 2698 et seq., in a suit alleging labor law violations because they were not aggrieved employees under Lab C, § 2699; the federal doctrine of associational standing does not apply to such suits, the cause of action is not assignable, and the provision of Lab C § 2699.3(a), allowing a representative to give written notice of violations, does not relate to standing to bring an action. Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court (Cal. June 29, 2009), 46 Cal. 4th 993, 95 Cal. Rptr. 3d 605, 209 P.3d 937, 2009 Cal. LEXIS 6015.
No PAGA Claim When No Individual Claim
Former employees lacked standing to assert a non-class representative claim under the California Labor Code Private Attorneys General Act of 2004 where they had abandoned a class action, they alleged only that they personally suffered violations of numerous Labor Code statutes, and the case law did not support their argument that if a named plaintiff had standing to bring his personal claims, he also had standing to bring non-class representative claims. Adams v. Luxottica U.S. Holdings Corp. (C.D. Cal. July 24, 2009), 2009 U.S. Dist. LEXIS 130660.
Plaintiff Settles Individual Claim Has No PAGA Claim
By accepting a settlement and dismissing his individual claims against an employer defendant with prejudice, plaintiff no longer met the definition of “aggrieved employee” under the Labor Code Private Attorneys General Act of 2004. Therefore, plaintiff did not have standing to maintain an action under PAGA against defendant, and defendant’s motion to dismiss was properly granted. Kim v. Reins Internat. California, Inc. (Cal. App. 2d Dist. Dec. 29, 2017), 227 Cal. Rptr. 3d 375.
Where an employee has brought both individual claims and a claim under the Labor Code Private Attorneys General Act of 2004 (PAGA) in a single lawsuit, and then settles and dismisses the individual employment causes of action with prejudice, the employee is no longer an “aggrieved employee” as that term is defined in the PAGA, and therefore that particular plaintiff no longer maintains standing under PAGA. Kim v. Reins Internat. California, Inc. (Cal. App. 2d Dist. Dec. 29, 2017), 227 Cal. Rptr. 3d 375.
Penalties could be imposed every pay period under Lab C § 210 and Lab C § 225.5 for underpayments arising from violations of a living wage ordinance, and trial court did not abuse its discretion in awarding such penalties or in declining to reduce the penalties under Lab C § 2699(e)(2), although construction of the ordinance was not clearly settled and the employer had good faith arguments. Amaral v. Cintas Corp. No. 2 (Cal. App. 1st Dist. June 11, 2008), 163 Cal. App. 4th 1157.
Employer Inability to Pay Damages
Trial court reasonably determined under Lab C § 2699(e)(2) that an award of the maximum penalty amount would be unjust based on evidence that (1) after certain dates, the employer took its obligations under Wage Order No. 9 seriously and attempted to comply with the law and (2) the employer was unable to pay penalties from ongoing revenues because of a lost contract. Thurman v. Bayshore Transit Management, Inc. (Cal. App. 4th Dist. Feb. 27, 2012), 203 Cal. App. 4th 1112, 138 Cal. Rptr. 3d 130.
Meal and Rest Period
In a meal-and-rest period case, an employee was not entitled to recover private attorney general penalties under both Lab C § 558 and Wage Order No. 9-2001. Lab C § 2699(b) allows the recovery of civil penalties only for violations of the Labor Code, and allowing plaintiff to recover penalties under both provisions would have resulted in an impermissible double recovery for the same act. Thurman v. Bayshore Transit Management, Inc. (Cal. App. 4th Dist. Feb. 27, 2012), 203 Cal. App. 4th 1112.
Damages Allocation to California and Aggrieved Employees
PAGA rule of allocation of the civil penalty recovery (75 percent to the Agency and 25 percent to the aggrieved employees) applies when an aggrieved employee files a PAGA action, despite the language in Lab C § 558, providing that the full portion of the penalty that reflects underpaid wages is to be allocated to the affected employees. Mejia v. Merchants Building Maintenance, LLC (Cal. App. 4th Dist. Aug. 13, 2019), 251 Cal. Rptr. 3d 61.
Attorney Fees and Costs
Employee was entitled to an award of attorney fees as a matter of right under Lab C § 1194(a), Lab C § 2699(g), and Lab C § 226(e) after a favorable settlement of a claim for a small amount of overtime wages; given the nature of the dispute, the appellate court reasonably could award a small amount of fees, and it was unnecessary to remand to allow the trial court to correct the error it made when it denied fees. Harrington v. Payroll Entertainment Services, Inc. (Cal. App. 2d Dist. Feb. 28, 2008), 160 Cal. App. 4th 589.