California Labor Code 2698 Overview & Example Scenarios

California Labor Code 2698, also known as the Private Attorneys General Act (PAGA), allows employees who have suffered some kind of wrong to sue their employers in a civil action. The Labor Code functions by permitting an employee to sue in any case where civil penalties are available, turning part of those civil penalties into an award for the employee if they win.

California Labor Code 2698 Explained in 90 Seconds

Although California Labor Code 2698 carries the name, California Labor Code 2699 actually contains all of the “meat” the code has. The basic function of these two codes is to create a remedy for wronged employees. Whenever a civil penalty can be assessed against an employer for violating California’s labor code, an employee can choose to sue the employer directly and recover some of the money for themselves. Under California Labor Code 2698 and 2699, employees can also sue on behalf of other current or former employees who have been wronged.

If they choose to pursue an individual suit, employees recover 25% of whatever penalty is assessed against the employer. If an employee attempts to recover a civil penalty against their employer and the employer initiates their own citation of an employee involving the same facts and circumstances, the employee’s ability to sue is extinguished.

Employees who successfully bring a case against their employer (meaning they win the lawsuit) have their reasonable attorney’s fees paid for, meaning the suit comes at no cost to them unless they incurred unreasonable expenses. Finally, this Labor Code has no impact on an employee’s ability to seek worker’s compensation.

What Can You Sue for Under PAGA?

California Labor Codes 2698 and 2699 cover a wide variety of different things an employee could sue for, such as:

• Minimum Wage and Overtime Issues: An employer failing to pay an employee the proper minimum wage or failing to pay overtime hours for overtime worked could be sued under California Labor Code 2698.
• Meal and Rest Break Violations: Employers not giving their employees proper meal and rest breaks according to how many hours the employee has worked in that shift can be held liable for failing to provide these breaks.
• Unsafe Working Conditions: Generally unsafe working conditions are another form of violation that California Labor Code 2698 protects against. An employer who is not maintaining the workspace of their employees could be liable for having unsafe working conditions.
• Issues with Recordkeeping or Wage Statements: Employers who withhold certain records from their employees or are not transparent about wage statements are also in violation of California Labor Code 2698. An employee suffering under such harm could sue and recover.

It is important to note that California Labor Code 2698 does not cover all workplace disputes, only those that have civil penalties attached to them via California law. Things like wrongful termination, for example, do not have this penalty attached and therefore cannot be sued over through California Labor Code 2698.

How Does a PAGA Lawsuit Work?

Generally speaking, a PAGA lawsuit will begin with the employee bringing their issue to their employer or superior. If this resolves the issue, no lawsuit is necessary. If it does not, the employee has two potential choices. The first is to file a claim with the California Division of Labor Standards Enforcement, or DLSE. The DLSE has many categories of claims that can be filed on their website, which will be linked later in this article. Alternatively, instead of filing a claim with the DLSE, an employee can go directly to an attorney and file a lawsuit against their employer. This lawsuit is then filed on behalf of the employee bringing the claim and the state.

What are the Potential Outcomes of a PAGA Lawsuit? 

Employers who are found to have violated California’s labor code have a civil penalty assessed against them, which the employee who brought the case gets a share of. This share is typically around 25%, and the state collects the rest. In some cases, a court may issue an injunction against the employer to ensure they do not violate the law again.

Important Considerations About PAGA

Because they go through the state and the Labor and Workforce Development Agency, PAGA claims can be somewhat more complex and time-consuming than a normal lawsuit. The employer will have to be investigated for the alleged violation, meaning documentation and testimony will likely need to be produced.

Another problem employees unfortunately can run into when bringing a PAGA claim is retaliation from their employer. Because of this, it is vital for an employee to seek legal advice from an experienced employment attorney who can provide guidance on what to do and when to do it to get optimal results. Employer retaliation, if it takes place, also complicates the case, so having an attorney becomes even more important.

Finally, PAGA lawsuits typically have a statute of limitations period of one year after the alleged violation took place. This means that employees must bring their claim before a year after the violation happened, otherwise the claim cannot be brought.

Alternatives to PAGA Lawsuits

Employees have a few alternatives to filing a PAGA lawsuit. The first has already been mentioned, namely, to file a claim with the DLSE. Issues involving wages especially are well-suited for this, as the DLSE handles many wage claims and has a good infrastructure for it. Employees can also report violations to appropriate government agencies, who can then address the issue themselves. An example of this would be reporting unsafe working conditions to the Occupational Safety and Health Administration, or OSHA. Finally, employees can seek internal resolution by going through the employer’s own channels to solve the issue. The viability of this strategy will change depending on the nature of the violation, but if available, can theoretically be a simpler resolution to the issue.

Example Scenarios

Example 1: Meal break violation on the part of employer, employee sues.

• Scenario: A print shop worker is refused his meal break on multiple occasions, so he decides to sue his employer under California Labor Code 2698. His employer claims he cannot do so.
• Violation: Failure to provide meal breaks.
• How Labor Code 2698 Protects: Because meal break violations are protected by a civil penalty, the employee in question here could sue and recover 25% of the penalty if it is successfully brought. The employer is incorrect in asserting that he cannot sue.

Example 2: Employee is terminated for pointing out unsafe working conditions, other employee sues on her behalf.

• Scenario: Two grocery store stockers discover that the freezers are being poorly maintained such that they leak water out from underneath them. This creates a hazard, as the chill air from the freezers cools the water and freezes it in places. One of the two stockers points this out and is fired by her employer. The other employee brings a suit against the employer for failing to maintain safe working conditions.
• Violation: Failure to remedy improper working conditions.
• How Labor Code 2698 Protects: In this situation, Labor Code 2698 allows for the second employee to sue on behalf of the first employee. It is important to note that this suit would not be for the wrongful termination: that fact is only present to demonstrate that Labor Code 2698 lawsuits can be filed on the behalf of other employees, including ones that no longer work at that place of employment.

Example 3: Employee initiates suit, employer alleges employee violation under the same facts.

• Scenario: A cook intentionally makes it so that his employer is unable to pay him on time and then sues under California Labor Code 2698 to impose a civil penalty for failure to pay wages on time. The employer simultaneously initiates a citation against the employee for avoiding payment.
• Violation: Employer filing of citation bars employee’s ability to bring a claim.
• How Labor Code 2698 Protects: When both employee and employer attempt to bring a claim of a violation against each other, the employer prevails, and the employee’s claim is destroyed. In this case, if the cook were found to have not acted in bad faith in avoiding payments, the claim would likely be possible again.

Resources for Employers and Employees

1. California Labor Code 2698
2. California Labor Code 2699
3. California Department of Industrial Relations
4. California Department of Industrial Relations – Division of Labor Standards Enforcement
5. California Department of Industrial Relations – Division of Labor Standards: How to File a Wage Claim

Connect with an Attorney

California employment law can be complex for an aggrieved employee to navigate, even though there are many options for a remedy available to that employee. If you believe you have been subject to a violation of California’s labor laws, you should contact an employment attorney and have your case evaluated. Because these claims have a statute of limitations period attached to them, time is of the essence in bringing a claim. Additionally, because employees recover reasonable attorney’s fees if they win their case, the case comes at no cost to the employee. LawLinq is an attorney referral service that connects employees with skilled employment attorneys who can help them bring their case. If you need an employment attorney, or know someone who does, don’t hesitate to contact us by calling (855) 997-2588 or by filling out our form online!