An easy way to cut your PAGA exposure in half
Jasmin B. Bhandari
We previously reported on how to limit your liability in PAGA cases with meal break waivers.
In the wake of AB1513, which requires piece-rate employees to be separately compensated for rest, recovery, and nonproductive time, many dealers and other employers moved to weekly pay periods to more easily account for overtime, rest breaks, and the like at the correct rates. While this change is the right move from a compliance standpoint, in the event any wage and hour violations nevertheless accrue, it results in much higher penalties under PAGA – the Private Attorney General Act – which counts penalties every pay period in which a violation occurs.
Accordingly, employers can cut their potential PAGA liability in half by moving to bi-weekly pay periods (two workweeks per pay period). Instead of 52 pay periods, resulting in $5,200 potential penalty exposure for each person, the exposure is limited to 26 pay periods, or $2,600 per person employed for the entire PAGA period (assuming a violation each pay period).
Should you wish to change pay periods, please contact experienced counsel to ensure adequate notice is provided to employees, and that your wage statements accurately reflect this change and still show all the required details for each week covered in the pay period.