Liability Insurance Policies May Cover PAGA Lawsuits

By Shaun Crosner (August 6, 2018, 1:44 PM EDT) -- In recent years, thousands of California employers have faced lawsuits under the Private Attorneys General Act of 2004. PAGA grants "aggrieved employees" — defined as current or former employees against whom a violation of the California Labor Code allegedly was committed[1] — a private right of action to seek civil penalties on behalf of the California Labor and Workforce Development Agency.[2] In most cases, 75 percent of any civil penalties recovered are distributed to the Labor and Workforce Development Agency, with the plaintiff employee and other "aggrieved employees" retaining the remaining 25 percent.[3] Prevailing employees under PAGA also are entitled to an award of reasonable attorneys fees and costs.[4] PAGA lawsuits can be predicated on a wide variety of alleged violations of the Labor Code,[5] but they are most commonly predicated on alleged failures to (1) pay minimum and overtime wages, (2) provide required meal and rest breaks to employees, (3) provide accurate wage statements to employees, (4) reimburse necessary business expenses, and (5) promptly pay wages due upon termination or discharge of an employee....

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