In California, labor compliance has evolved significantly over the last decade—and so have the consequences of non-compliance. For employers, supervisors, and HR professionals, understanding the Private Attorneys General Act (PAGA), liquidated damages, and wage and hour issues is more than just legal housekeeping—it’s essential to avoiding costly litigation and government scrutiny.
The CREW Act, updates to the California Labor Code, and shifts in trial courts’ interpretations have made it clear: even a single wage statement violation can now trigger civil penalties that accumulate per pay period. This article explains how supervisors can stay ahead of PAGA claims, what the law expects from your payroll and HR practices, and why every violation now starts at $50,000—with much more at stake.
Why Liquidated Damages Now Start at $50 000: The Impact of the CREW Act
The CREW Act redefined how liquidated damages apply in California labor law, especially in the context of unpaid wages. Under prior law, certain technical or procedural missteps resulted in warnings or minor fines. Today, those technical violations may begin at $$50,000 per pay period per employee and escalate quickly.
Why the change? The California Legislature intended to deter repeated non-compliance and send a message that even underlying unpaid wage violations would trigger automatic fines.
That means failing to issue an itemized wage statement, properly document hours, or comply with wage order compliance standards can now result in potential PAGA penalties, regardless of intent.
Understanding the Private Attorneys General Act (PAGA) derivative penalties
PAGA allows a current or former employee—the PAGA plaintiff—to sue on behalf of the state for labor code violations committed by their employer. When a violation occurred, the employee may file PAGA actions against the company without needing class certification.
Under PAGA:
- Each employee is considered an aggrieved employee
- Penalties accrue per pay period
- Employers may be liable even for alleged labor code violations that seem minor
- There are limited cure provisions depending on the violation
Supervisors and employers must therefore take reasonable steps to prevent violations before they trigger automatic fines or PAGA lawsuits.
The Importance of Conducting Periodic Payroll Audits for Wage and Hour
One of the most effective ways to avoid PAGA claims is by conducting periodic payroll audits. These audits can catch:
- Wage and hour calculation errors
- Wage statement violations (e.g., missing dates, OT calculations, or incorrect pay rates)
- Consecutive pay periods where time cards or earnings were mishandled
- Issues in weekly pay periods or when employees are misclassified
By identifying errors early, you can take appropriate corrective action before an aggrieved employee files a claim.
Employers should aim to audit at least four consecutive pay periods every six months for wage order compliance. This builds a strong compliance record and demonstrates a commitment to labor law.
Taking Reasonable Steps for PAGA Claims
When violations alleged surface—either through internal complaints, a PAGA notice, or a formal lawsuit—supervisors should act swiftly.
1. Coordinate With Legal and HR
Supervisors should report potential issues immediately to HR or legal counsel. Do not delay or attempt to handle a PAGA plaintiff complaint informally.
2. Review the Practice Giving Rise to the Violation
Many PAGA claims stem from repeated errors tied to a single practice, giving rise to many pay violations—such as rounding hours, failing to provide meal periods, or having outdated lawful written policies.
Corrective action here often requires disseminating lawful written policies that comply with the applicable labor code.
3. Address the Underlying Cause
If the violation involves unpaid wages, wage statements, or other employment matters, supervisors may help organize back-pay efforts, policy updates, and employee outreach.
PAGA Penalties and Derivative Exposure
A single PAGA violation can lead to multiple penalties:
- $100 for the first violation, then
- $200 for each subsequent violation
- Penalties recovered are split: 75% to the Workforce Development Agency, 25% to the aggrieved employee
But it doesn’t end there. If the PAGA claim is based on wage and hour issues, other derivative penalties may apply under:
- California Wage Orders
- Wage Statement Regulations
- Federal Labor Standards (for multi-jurisdiction employers)
All of these legislatures allow individuals to recover civil penalties if the employer does not pay wages justly. It’s similar to how no-fault insurance delays are highly frowned upon legally. However, the party at fault should have at least one violation to their name if someone personally suffered.
Written Notice and Cure Provisions: A Narrow Window
Employers served with a PAGA notice can sometimes avoid litigation if they act quickly. However, cure provisions are strict and limited.
For example:
- Some itemized wage statement violations can be cured within 33 days by issuing correct statements
- Employers must show appropriate corrective action and provide evidence to the Labor and Workforce Development Agency
- Curing is not available for every violation, especially when subsequent violations have occurred or the employer has been previously cited
Therefore, early recognition and fast response are key.
How Many PAGA Lawsuits Begin: Triple Zero Calls and Notice Failures
Many PAGA lawsuits start not from malicious intent, but from repeated technical violations or ignored complaints.
A common example? The “triple zero” wage statement—showing $0 in hours, pay, and deductions due to errors in data imports. When issued for four consecutive pay periods, this becomes strong evidence of willful non-compliance.
Supervisors must ensure employment matters like accurate reporting, weekly pay periods, and meal/rest break tracking are consistently managed.
Training Supervisors to Avoid Costly Litigation
Training supervisors is a preventative measure every employer should invest in. Well-trained supervisors understand:
- Their role in upholding lawful written policies
- How to escalate concerns before they become PAGA litigation
- The signs of wage and hour issues among frontline workers
- When to recommend legal review of pay practices or schedule changes
- The importance of maintaining a clean wage statement record for every pay period
With proactive training and reasonable steps, employers can avoid becoming defendants in many PAGA lawsuits.
The Role of Trial Courts and Injunctive Relief
In some cases, trial courts may offer injunctive relief in addition to financial penalties. This can require:
- Policy reform
- Supervisor retraining
- Public documentation of corrective action
Additionally, courts may award reasonable lodestar attorneys fees to the prevailing PAGA plaintiff, increasing the employer’s total financial exposure.
This makes it critical to act long before the court determines that violations occurred.
What If an Employer Cured the Violation?
Even if an employer cured a violation later, the timing and nature of the correction matter. In PAGA cases, courts will examine:
- When the violation occurred
- Whether the employer’s conduct giving rise to the issue was negligent or willful
- If the cure was part of a proposed cure under PAGA law or done only after suit was filed
- Whether injunctive relief is still needed to prevent recurrence
Final Thoughts: Preventing PAGA Litigation Starts with Smart Supervision
Labor compliance in California is a fast-moving target, especially in the age of PAGA. For employers and supervisors, the best defense is early recognition, proactive correction, and a solid internal process for managing payroll and employee relations.
From ensuring written notice to updating lawful written policies, supervisors must treat every detail—from a missed hour to an incorrect pay period label—as a possible legal trigger.
With the CREW Act liquidated damages now starting at $50,000 and escalating for every error, the message is clear: employer’s conduct matters more than ever.
Fight PAGA Notice with BLG
If your organization is facing a PAGA notice, wage audit, or you simply want to review your wage and hour practices, reach out to TheBourassa Law Group.
Our employment lawyers help employers manage PAGA claims, conduct internal audits, and respond to alleged violations before they escalate into lawsuits.
Contact us today to take the first step toward compliance, confidence, and protection from unnecessary risk.
1-800-870-8910