Avoiding PAGA Lawsuits in California: What Changed in 2024 and How to Stay Compliant

What Is PAGA?

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Back in 2004, California passed the Private Attorneys General Act (PAGA) to fill a major enforcement gap in the state’s labor system. With thousands of labor laws on the books and limited staff to enforce them, lawmakers handed the job to employees — literally.

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This means that any current or former employee can file a lawsuit against your business for labor violations on behalf of the state. But here’s the catch: the violations don’t have to affect them personally. 

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If they believe others at the company were affected, one person’s complaint can turn into a claim representing dozens or even hundreds of coworkers even if those coworkers never consented. 

Why PAGA poses a serious risk to employers

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PAGA has become one of California’s most aggressive labor enforcement mechanisms and a favorite of many attorneys in the state. It targets wage and hour violations, break compliance failures, late reimbursements, and even minor documentation errors that compound over time.

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The penalties can be staggering and are often excessive when you consider the violation that triggered the suit. That’s because they’re calculated per violation, per employee, per pay period. It doesn’t matter if the issue was intentional or not.

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So, if a few employees decided to clock in early, that can constitute a violation in the eyes of PAGA law.

What changed in 2024?

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After years of backlash from small business advocates and employer groups, California passed a package of reforms in 2024 that aimed to address its overuse, in most cases by lawyers more than by actual employees. 

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While PAGA law remains powerful, the 2024 changes introduced meaningful reforms in terms of clearer standards, limited opportunistic claims, and reduced penalties. These offer some breathing room, especially for employers who take proactive steps toward compliance.

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Here’s a breakdown of what changed.

1. Employees must have experienced the violation

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Before 2024, any employee could file a PAGA claim for labor violations they simply observed, even if they weren’t personally affected. That standard has now changed.

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According to one HR professional on Reddit, employees must now prove they “personally experienced the violations” in order to bring a claim, making it slightly harder for plaintiffs to sue their employers. This reduces the volume of speculative lawsuits (the so-called “fishing expeditions”) and limits the reach of opportunistic filings based solely on second hand knowledge.

2. Higher penalties for repeat offenders

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The revised law raises the stakes for employers who fail to correct labor violations after they’ve been made aware of them. 

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If your business is flagged in a PAGA claim and continues to violate labor codes in the same way, the penalties get steeper. Courts are now encouraged to hit repeat offenders harder, especially if they ignore warning signs or continue to act in bad faith.

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This means turning a blind eye, or even postponing compliance improvements, can be extremely costly for you and your organization. 

3. Reduced penalties for employers who act quickly

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On a more positive note, the 2024 amendments have made it possible for erring employers to receive reduced penalties if they show they made reasonable efforts to comply with labor laws and acted quickly when they receive a PAGA notice.

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Quoting our prior source from Reddit,

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“Everything else that changed in 2024 when they amended this Act was to make penalties for violating labor codes/laws higher for repeat offenders and less severe for companies that show they took reasonable steps to maintain compliance and with those that act quickly when they receive a PAGA notice.”

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In other words, if you catch a violation early and take documented steps to make restitution, the court can reduce your penalties by 15% if you fix the violation before receiving a PAGA notice and 30% if you fix it within 60 days after receiving a PAGA notice. 

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Of course, this only works if you can show you took “reasonable steps.” That means having systems in place to help you avoid a PAGA lawsuit altogether, not scrambling after the fact. 

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By reasonable efforts, we mean:

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• Maintaining clear, documented break policies and using tools to ensure compliance
• Implementing accurate time and mileage tracking systems
• Conducting regular internal audits to catch and correct issues early
• Providing ongoing employee training around wage and hour rules
• Responding quickly and transparently to any complaints or formal notices

Common mistakes that lead to PAGA lawsuits

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Most PAGA lawsuits in California don’t start with major fraud or willful neglect. They begin with small oversights like missed breaks, unclear time records, or unpaid mileage that repeat over time and go uncorrected. 

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So how do you stay compliant? By knowing what mistakes to avoid and making reasonable efforts to address them. The following are some of the most common mistakes that can lead to PAGA lawsuits.

1. Wage and hour violations

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Break violations, miscalculated overtime, and incomplete time logs are some of the most common triggers for PAGA lawsuits. 

What does this look like in real life?

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Robert is one of the most hard working members of your crew. He tends to work through his lunch break because he doesn’t have to deal with the distractions around him from co-workers. While you respect him and appreciate his great work ethic, when Robert doesn’t take a break, he’s violating California labor law. 

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California has specific rules about when breaks should happen, how long they must be, and how you need to respond when breaks aren’t taken. If your break tracking system doesn’t document when breaks occur or track hours accurately, you may not even realize there’s a problem until it’s too late.

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For example, a company with 10 employees racked up $206,000 in penalties in just one year for missed breaks alone. That’s exactly the kind of situation  that triggers PAGA lawsuits in California.

2. Not reimbursing for mileage or expenses

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Somewhere between the job site and the office, an employee in the field loses their fuel receipt. When they arrived back at the office, they forgot the actual distance they covered during that work trip so they went with their best estimate.

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These mistakes might not seem like a big deal. But, California’s mileage reimbursement law states that all business expenses are treated as wages. If a field rep accumulates mileage, uses their personal phone for work related tasks, or pays out-of-pocket for job-related tools, that money needs to be reimbursed in full and on-time.

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And here’s the kicker: if it isn’t reimbursed the right way, it now becomes a wage issue. And under PAGA, wage-related violations are fair game.

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So now, you start asking yourself:

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• Do we have a clear process for submitting mileage?
• Can I prove every employee was reimbursed correctly?
• What happens if someone challenges our records six months from now?

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If your answer to any of these questions involves having to dig through months’ worth of spreadsheets and text messages or recalling verbal agreements, you’re facing a lot of risk. And once an employee raises one concern, lawyers will start to ask: how many others were underpaid the same way?

3. Disciplinary and termination disputes

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When it comes to firing someone, or even writing them up, documentation matters. Employees who are disciplined without a clear paper trail often turn around and challenge the decision. And if that same employee also experienced missed breaks, late pay, or unpaid expenses, it all gets bundled into a PAGA claim.

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California requires final wages to be paid immediately at termination. That includes earned PTO, bonuses, or commissions. If you fail to pay these wages at termination, you risk encountering multiple labor code violations all at one time. 

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In one case, a terminated employee claimed they were fired unfairly and hadn’t received final pay on time. Once lawyers got involved, they discovered break violations, late reimbursements, and payroll errors going back months. 

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What began as a firing dispute quickly unraveled into a much larger California labor law compliance issue, costing the employer far more than severance.

How Timeero helps

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PAGA lawsuits rarely begin with dramatic blowouts or disgruntled employees storming out the door. More often than not, they’re caused by everyday gaps in compliance, which could be an undocumented break, a mileage reimbursement that slipped through the cracks, or a missing time entry that no one flagged.

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As one HR professional puts it, “PAGA has been around since 2004, and the way a business would stay compliant is by not violating labor codes and labor laws in California” 

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“While labor law is complicated, if you have a company that can support it (if you are a company of 25+ people), you should look into getting a dedicated HR employee as many other legislation starts to apply to you at that size to ensure you're following best practices. Otherwise, you can outsource your HR functions and have a consultant come on board to ensure you are compliant.”

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Of course, hiring an internal HR pro or retaining a consultant can add more overhead and still won’t guarantee airtight compliance if your day-to-day operations rely on manual tracking or outdated tools.

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Whether or not you have HR support, Timeero gives you a simple, reliable way to close the operational gaps that most often lead to PAGA lawsuits. It’s one of the few tools that takes time tracking for California businesses into consideration, especially for those in high-risk industries.

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Here’s how Timeero helps.

Time tracking

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Untracked time is one of the easiest ways to fall out of compliance. If you’re relying on handwritten timesheets or spreadsheets, you may fall victim to data gaps, rounding issues, and unverified overtime, all of which can trigger PAGA penalties.

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Timeero automates time tracking for California businesses by giving employees the ability to clock in and out with their phones. Each entry is time-stamped and GPS-verified, making them more credible. Managers can view hours and access full shift histories in real-time, while having the ability to flag inconsistencies whenever needed.

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For example, a logistics company using paper timecards couldn’t dispute a former employee’s claim that they frequently worked late without pay. By using Timeero, every clock-out was recorded and time-stamped and could be used for reference to verify claims.

Mileage tracking and reimbursement reports

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Mileage is one of the most commonly overlooked reimbursement categories and one with the most legal risks under PAGA. If you can’t prove that an employee’s travel expenses were tracked and reimbursed correctly, you may face penalties for underpayment.

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Timeero automatically logs mileage using GPS technology. Every trip is recorded in real time, while being tied to job locations and addresses. Mileage data is easily converted into reports for simplified payroll.

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So, if a field technician drives hundreds of miles a month and later files a claim for unpaid travel expenses, you won’t need to do the guesswork. With Timeero, you’ll have a complete record of each trip — when it happened, where they went, and how far they drove — making you ready to verify or dispute the claim with confidence.

California break compliance

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High-performing teams often move fast, which is exactly where break compliance falls apart. In many industries, employees skip lunch to hit deadlines, take shorter breaks during busy shifts, or forget to log them altogether. If you’re set on tracking the employee breaks California law recognizes, manual logs won’t cut it.

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In fact, missed, shortened, or undocumented breaks are among the most common labor code violations cited in California. And when there’s no proof those breaks were taken, courts will usually side with the employee. 

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With Timeero, employees are prompted to take their legally required breaks at the right time. Starting and ending times are automatically recorded in the app. If someone skips or shortens a break, Timeero flags it immediately, allowing managers to take action and issue premium pay as required by law.

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You also gain access to additional features specifically designed for California break compliance:

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• Daily sign-off tools employees confirm they took their required breaks and are asked to explain any break violations
• Real-time alerts receive a notification or email to let you know when someone is non-compliant
• Exportable reports access Timeero’s generous reporting options for payroll, audits, or legal defense
• Timestamps and digital signatures personal signatures verify break logs are complete and accurate

GPS and geofencing technology

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Timeero’s GPS tracking and geofencing tools are designed to eliminate location guesswork. You’ll know exactly where your employees are when they clock in or out, whether they’re on-site, en route, or somewhere they shouldn’t be.

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Here’s how it works:

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• Live GPS tracking shows a breadcrumb trail of employee movement while they’re on the clock
• Geofencing lets you create virtual job site boundaries, so employees can only clock in or out when they’re within an approved area
• Location stamps are logged with every time entry, creating a clear timeline tied to each shift
• Out-of-bounds alerts notify you when someone clocks in from the wrong location

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You’ll also be able to generate reports that pair time data with travel routes, which is handy for both payroll and legal defense.

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So, if a technician claims they weren’t paid for travel between job sites (but they actually were), and there’s no GPS data to reference, more than likely you’ll be overpaying reimbursement costs. But when you use Timeero, every location, timestamp, and trip detail is stored and ready to pull, making it much easier to confirm the facts, issue fair reimbursement, or dispute inflated claims.

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Custom Fields and photo upload for expense tracking

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In industry fields  like construction, field services, and maintenance, employees frequently pay out-of-pocket for fuel and equipment needed during jobs. Without a structured system in place to log those purchases, it’s easy for receipts to get lost or for reimbursements to fall through the cracks. 

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When those expenses aren’t tracked or reimbursed properly, they can be reclassified as unpaid wages. And under PAGA, that’s a fast track to penalties.

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With Timeero, employees can capture expense records and submit them for review all from their mobile device within seconds. 

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Timeero’s Custom Fields are tailored to your business, so you can collect the exact information you need, such as:

• Type of expenses incurred
• Amount (manual calculation required)
• Job or client name
• Materials used

Records and reports

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If you’re hit with a PAGA lawsuit, the first thing attorneys and regulators will request is documentation. If your records are spread across inboxes, file cabinets, or old Excel sheets, you’re left scrambling to dig through countless files and old records.

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Timeero brings all of your labor compliance data into one secure system, helping you stay one step ahead on California labor law compliance. Time entries, break logs, mileage reports, and expenses are all stored in the same place and can be instantly exported when needed. You don’t have to scramble – just sign into your Timeero account, generate the appropriate report, and present your proof.

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Stay ahead of PAGA risks with tools that actually work

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You don’t have to wait for a labor claim to take control of your compliance strategy. With Timeero, you get more than just a time tracking app. You get a complete compliance toolkit that helps you:

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• Verify time, mileage, breaks, and expenses with GPS-backed precision
• Respond proactively to violations before they turn into lawsuits
• Generate audit-ready records in seconds
• Prove you're taking “reasonable steps” and not making excuses
• Understand how to track employee breaks California courts will accept as legally valid

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