The Labor Code Private Attorneys General Act of 2004 (SB 796), effective January 1, 2004, will likely increase costs to employers for Labor Code violations and result in more wage and hour litigation. Employers should review their employee handbooks and personnel policies to ensure that they are up to date and in compliance with the law. It is now more important than ever that employers become familiar with, and comply with, California's sometimes intricate wage and hour law.
This new law allows employees to sue their employers for any violations of the Labor Code not prosecuted by state agencies, other than workers' compensation. Under previous law, only state agencies could sue for Labor Code violations, and penalties were only infrequently awarded.
Aggrieved employees can sue on behalf of themselves as well current and former employees, and are entitled to recover their attorneys' fees and 25% of any penalties awarded. The other 75% of any penalties recovered by employees will be distributed to the state's general fund (50%) and to the State's Labor and Workforce Development Agency (25%). In addition, every Labor Code provision which did not previously have an assigned penalty now has one - unless otherwise provided, the minimum penalty for a first Labor Code violation is $100, and for each subsequent violation, $200.