New Regulations Proposed for Enforcing PAGA Reform

Enacted in 2024, legislation reforming the Private Attorneys General Act of 2004 (PAGA) brought sweeping changes designed to better serve the goals of California wage-and-hour enforcement while providing employers with tools and procedures to correct errors and limit excessive penalties. To provide additional PAGA enforcement rules, the California Labor and Workforce Development Agency (LWDA) has now issued proposed regulations designed to clarify and expand upon the statutory provisions of PAGA reform related to notice and other procedural requirements. The written comment period for the proposed regulations closes on March 23, 2026.

PAGA allows individuals to bring various types of California wage-and-hour violation claims on behalf of themselves and other aggrieved employees to recover statutory penalties. As the statutory reform and proposed rulemaking note, the 2024 amendments to PAGA were designed to promote earlier and more effective resolution of actual issues.

One major area the proposed regulations address is the initial notice of claims. While PAGA has always required notice of claims that provide at least some basis in fact and law for the specific claim raised, in practice many notices have failed to meet this basic requirement. The proposed regulations are designed to standardize the notices’ format and impose additional requirements on “high-frequency” and “vexatious” filers in an effort to curb abuse and facilitate more effective resolution of actual issues.

One hallmark of the 2024 PAGA reform was an expanded ability for employers to cure defects identified in PAGA notices for a broader range of violations — and do so earlier in the process before expending considerable resources in litigation. The proposed regulations provide a standard set of rules for cure procedures including how employers must submit proposals, how the LWDA will evaluate them and additional conferences to determine if an early cure proposal will be acceptable.

While the proposed regulations focus on the process of filing and resolving claims, the major reform that employers need to remember from the 2024 PAGA amendments is the ability to take “reasonable steps” to cap penalties. If an employer takes all reasonable steps to avoid wage-and-hour violations subject to PAGA before ever receiving a PAGA notice or records request, the employer can limit penalties to just 15% of the statutory amount. Even after receiving a PAGA notice or records request, employers can take all reasonable steps to comply with wage-and-hour requirements to cap penalties at 30% of the statutory amount.

All reasonable steps include, but are not limited to:

• Conducting periodic payroll audits and taking appropriate action in response to those audit findings;
• Disseminating lawful written policies designed to comply with wage-and-hour laws to all employees;
• Training supervisors on applicable Labor Code and Wage Order compliance; and
• Taking appropriate corrective action against supervisors when they contribute to wage-and-hour violations.

Employers should use this announcement of PAGA regulations as an opportunity to reengage in these reasonable steps now to avoid violations and partially mitigate potential penalties.

Public comment on the proposed PAGA regulations closes on March 23, 2026. Comments may be submitted by email to Danielle West, Rulemaking and Program Analyst, at Danielle.West@labor.ca.gov. Written comments also may be submitted by mail to Danielle West, Rulemaking and Program Analyst, Labor and Workforce Development Agency, 1416 Ninth Street (MIC-55), Sacramento, CA 95814.  

Matthew J. Roberts, Associate General Counsel, Labor and Employment

CalChamber members can also use the Wage and Hour Guide to access resources related to the most common wage and hour topics that employers must comply with. Not a member? See how CalChamber can help you.

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