Significant amendments to California's Private Attorneys General Act took effect on June 19, 2024, fundamentally restructuring the state's employment enforcement landscape through the passage of AB 2288 and SB 92. These legislative changes replace the previous litigation-focused framework with a new legal standard centered on documented employer diligence and compliance, marking the most substantial revision to PAGA since its inception two decades ago.
For twenty years, PAGA has served as a source of substantial financial liability for California businesses, where minor technical errors could accumulate into massive civil penalties through the state's unique enforcement mechanism. The 2024 reforms introduce a paradigm shift that, for the first time, offers employers a structured mechanism to significantly reduce their exposure to these potentially devastating financial consequences.
The core transformation concerns an employer's ability to assert a new affirmative defense based on documented compliance efforts. By successfully demonstrating that a company took "all reasonable steps" to comply with the Labor Code before receiving a PAGA notice, courts may now drastically reduce potential penalties. This represents a fundamental departure from the previous system where technical violations often resulted in automatic penalties regardless of employer intent or compliance efforts.
The specifics of defining and documenting these necessary compliance steps have become essential for liability mitigation under the revised framework. Human capital compliance professionals emphasize that detailed auditing protocols, comprehensive record-keeping systems, and thorough management training now form the foundation of defensible compliance programs. The complete analysis detailing essential elements required to build a defensible "Reasonable Steps" file is available through the Private Attorneys General Act compliance resources that outline the substantial penalty reductions available under the revised law.
This legislative transformation carries significant implications for California's business environment and employment law landscape. The shift toward recognizing employer compliance efforts acknowledges the complexity of California's labor regulations while maintaining worker protections through alternative enforcement mechanisms. Industry experts note that immediate and proactive adoption of this new standard is critical for businesses seeking to navigate the changed legal environment effectively.
The reforms address longstanding concerns about PAGA's potential for generating disproportionate penalties for minor or technical violations while preserving the act's original intent of enforcing labor standards. By creating incentives for proactive compliance rather than focusing solely on penalty collection, the amended legislation represents a more balanced approach to employment law enforcement that could serve as a model for other states considering similar reforms.
