On July 1, 2024, Governor Gavin Newsom signed into law two Private Attorneys General Act (PAGA) reform measures that, together, will curtail rampant PAGA lawsuit abuse while significantly reducing potential penalties that are attached to such claims. One of the most notable changes to PAGA - and the most actionable for employers — is the reform to PAGA's penalty provisions. The PAGA amendments provide for significant reductions of the potential penalties recoverable in a PAGA action if an employer has taken "all reasonable steps" to ensure wage and hour compliance. These “reasonable steps” include:

• Conducting periodic payroll audits and taking action in response to audit results;
• Disseminating lawful written policies;
• Training supervisors on applicable Labor Code and wage order compliance; and
• Taking appropriate corrective action with regard to supervisors.