Posted on October 7th, 2025
What Is PAGA and Why Does It Matter?
California’s Private Attorneys General Act (PAGA) was passed with good intentions—empowering employees to file claims when the state didn’t have the resources to enforce labor laws.
But over time, PAGA has become a litigation factory. Instead of protecting workers from real harm, it’s often used as a weapon by plaintiff-side firms to extract massive settlements over minor or technical errors.
One recent report found that some law firms have filed thousands of PAGA notices, often based on small mistakes like a typo on a wage statement. That’s not protecting workers—that’s exploiting the system.
Why Employers Should Be Concerned
For business owners, especially small and mid-sized companies, PAGA lawsuits are devastating.
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Massive Financial Exposure: Even if an error was unintentional, penalties stack up quickly. One misclassified employee can cost hundreds of thousands of dollars.
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Plaintiff Attorney Advantage: Many firms actively hunt for technical violations instead of genuine workplace problems.
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Compliance Nightmare: California labor laws change constantly, making it easy for an otherwise well-meaning employer to fall out of compliance.
Real-World Example
Imagine this: you run a small business with 20 employees. You’ve always paid them on time, but one of your pay stubs has the employer’s address listed incorrectly. Under PAGA, that simple clerical mistake could trigger a lawsuit with fines and attorney fees that put your entire business at risk.
This isn’t a hypothetical—it happens to California employers all the time.
How Employers Can Protect Themselves
The good news is that businesses can take proactive steps to reduce risk:
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Audit Your Wage Statements – Make sure pay stubs comply with California’s strict requirements.
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Update Your Employee Handbook Annually – Laws change every year, and so should your policies.
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Train Supervisors – Managers are often the first line of defense against labor disputes.
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Work With Employer-Side Counsel – A lawyer who only represents employers will spot risks before they become lawsuits.
Final Thought
California’s PAGA system may not be going anywhere soon, but you don’t have to be a target. By investing in compliance, training, and proactive legal support, you protect not only your bottom line but also your ability to grow and run your business without fear of constant litigation.
