California Labor & Workforce Development Agency Mulls Over Public Comments on PAGA Reform Regulations

On February 6, 2026, the California Labor & Workforce Development Agency (“LWDA”) issued an official Notice of Proposed Rulemaking regarding the Private Attorneys General Act of 2004 (“PAGA”), codified in Labor Code section 2698, et seq.  (See Rulemaking: Labor Code Private Attorneys General Act of 2004 | LWDA.)  The proposed rulemaking establishes requirements for filing PAGA notices (notices of alleged Labor Code violations by employers and for which an aggrieved employee seeks to recover civil penalties) with the LWDA, provides guidance concerning the investigation and early resolution procedures administered by the LWDA, and implements statutory litigation-reporting obligations PAGA plaintiffs owe to the LWDA. 

The LWDA invited the public to submit written comments on the proposed regulations through March 23, 2026.  The LWDA then held a public hearing on April 9, 2026. The LWDA is now reviewing the comments submitted prior to and at the public hearing.  Based on its review, the LWDA will issue final regulations at a time to be determined. 

PAGA Background 

The California Legislature enacted PAGA in 2004, allowing employees to step into the shoes of the State and file lawsuits against their current or former employer for alleged Labor Code violations. Typically alleged violations concern the minimum wage, overtime wage, meal periods, rest periods, and expense reimbursements.  If successful, said employees (alleged “aggrieved employees”) may recover civil penalties against the employer that would otherwise only be recoverable by the state.  PAGA permits employees to file on behalf of themselves, and others similarly situated, allowing employees to proceed with a lawsuit like a class action but without the procedural protections required to certify a class.  This has resulted in thousands of lawsuits for the past two decades, drastically increasing costs for California employers.

As a precursor to filing a PAGA lawsuit, an employee must first provide notice to the LWDA and the employer describing the alleged Labor Code violations.  Over the years, PAGA notices and lawsuits increased dramatically.

Amidst growing outcry from California employers and businesses, the California Chamber of Commerce and others qualified an initiative titled “The California Fair Pay and Employer Accountability Act” for the 2024 ballot, seeking to eliminate PAGA altogether.  Instead, as a compromise, PAGA was reformed in the summer of 2024 via legislation. Major reforms included:

• caps on civil penalties for employers who take “reasonable steps” to comply with the Labor Code
• new cure provisions
• limiting employees to pursuing only claims for violations they personally experienced
• confirming the one-year statute of limitations
• adding a manageability requirement for PAGA lawsuit

(See  Changes to PAGA: An Overview for California Employers: Atkinson, Andelson, Loya, Ruud & Romo.)

The amended PAGA legislation applies to PAGA notices issued on or after June 19, 2024. The LWDA’s new proposed regulations will be the next chapter for PAGA. 

LWDA Proposed Rulemaking 

The LWDA recognizes the Legislature’s interest in increased LWDA oversight of PAGA actions and early resolution options for employers, thereby, hoping to decrease litigation costs that previously has led to PAGA criticism. Among other proposals, the draft regulations provide for:

• Administrative Notice Requirements: The proposed regulations aim to provide greater clarity and guidance to parties regarding the requirements of a PAGA notice, particularly as it relates to articulation of the facts and theories alleged to support the Labor Code violations asserted. 

A welcomed proposed rule for employers is to impose stricter requirements on “high frequency filers” (attorneys or law firms who have filed more than 200 PAGA notices within the past year) and “vexatious filers” (attorneys or law firms deemed by the LWDA to have repeatedly filed deficient PAGA notices).  In support of its proposed regulations, the LWDA noted that of the total of 8,846 PAGA notices filed with the LWDA from July 1, 2024, through June 30, 2025, five law firms filed 2,086 or 24% of the total PAGA notices.  LWDA chided these high frequency filers for using template PAGA notices, which are often are merely cut and pasted from prior notices and which lack or misrepresent basic facts.

• Administrative Early Resolution (“Cure”) Procedures: The proposed regulations seek to better implement the statutory early resolution procedures and are intended to provide greater guidance and direction to parties to ensure the efficient and effective functioning of these new administrative cure processes.

The 2024 PAGA amendments provided an option to cure for employers with fewer than 100 employees, but the amendments were unclear about that process.  The LWDA’s proposed rule describes how employees must be counted in determining whether the employer employed less than 100 employees during the one-year period before it received a PAGA notice, specifies the process for curing, and provides protections for employers by making cure communication privileged as confidential settlement discussions.

• Administrative Reporting Requirements: The proposed regulations add new obligations for parties proposing to settle a PAGA lawsuit.  These would require a settling plaintiff to submit to the LWDA additional materials when seeking approval of a proposed settlement.  In addition, the proposed regulations would require a settling plaintiff to provide notice to other employees who have pending PAGA claims against the same employer.  This regulation also describes the process for other employees with pending PAGA actions against the same employer to submit comments in favor of or against the proposed settlement and specifies that the LWDA must be provided at least 45 days to review a proposed settlement agreement.  Thus, this proposal, if adopted, will likely lead to additional administrative delays for employers seeking to settle PAGA lawsuits.

On balance, the new proposed regulations feature pros and cons for California employers.  Further, since these are mere proposed regulations, the final PAGA regulations that will be adopted, if any, are still to be determined.  AALRR will be watching closely for final PAGA regulations.  As always, if you have any questions, please email or call the author or your counsel at AALRR.

This AALRR publication is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process.

© 2026 Atkinson, Andelson, Loya, Ruud & Romo