Employers all over the State of California have been waiting earnestly for over two years for the California Supreme Court to issue its opinion in Kim v. Reins International California. A ruling that will decide whether a settling employee remains an aggrieved employee for purposes of the Private Attorneys General Act (PAGA). The wait is not over. In the meantime, the California legislature is considering whether to ease some of the burdens of PAGA for employers.

PAGA provides that, as an alternative to civil penalties being assessed and collected by the Labor and Workforce Development Agency (LWDA), civil penalties may be recovered through a civil action brought by an aggrieved employee on his or her behalf and on behalf of other aggrieved employees. (Labor Code section 2698, et seq.)

Among other Labor Code violations, PAGA authorizes an employer to “cure” specified violations of itemized wage statement requirements, within 33 days of the date of the notice from the aggrieved employee. (Labor Code sections 2699.3(c)(2)(A) and 2699.5.) A “cure,” in this context, signifies making the aggrieved employee whole and providing itemized wage statements for each pay period for the last three years.

However, Senate Bill 1129, seeks to expand the types of itemized wage statement violations that an employer could cure and would allow the employer 65 calendar days of the postmark date of the notice to cure the violation.

The current 33-day period to cure period is only permitted for two types of wage statement violations:

  1. failure to include either the start and end date of the pay period pursuant, and
  2. failure to provide the name and address of the legal employing entity.

The current cure period of 33 days hardly allows enough time for most employers to actually cure even these two violations. A corrected and “fully compliant” wage statement must be provided to every employee for every pay period going back three years from the date the PAGA notice was filed with the LWDA. For larger employers, curing such wage statement deficiencies could take months for a single year, much less, 33 days for a three-year time frame. Moreover, the requirement for “fully compliant” corrected wage statements is typically interpreted to mean wage statements that comply with all nine requirements set forth in the Labor Code section.

The bill also seeks to reduce, from three years to one year, the itemized wage statements that the employer would be required to provide in order to cure a violation and expand the types of itemized wage statement violations that can be cured.

These changes would allow more employers to take advantage of the cure period and remedy issues before a complaint is filed.

While employers wait on the California legislature and Supreme Court to provide more clarity on PAGA, employers should contact a Jackson Lewis attorney immediately upon receiving a PAGA notice. Time is of the essence when a PAGA notice is received, and remedying the curable violations could save employers hundreds, thousands, even millions of dollars in civil penalties.