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Is California about to get serious about PAGA reform?

April 6, 2026

This week, California regulators are taking a critical look at one of the state’s most harmful laws.

For the first time in recent memory, the California Labor and Workforce Development Agency will hold a public hearing on reforming the Private Attorneys General Act (PAGA). As it’s applied today, the law allows trial attorneys to prey on the state’s small and mid-sized businesses — filing frivolous, costly lawsuits over even the most minor violation of California’s complex labor code.

Recent attempts to reform PAGA have thus far fallen short.

To prove it, the California Business and Industrial Alliance (CABIA) created a database that tracks every PAGA lawsuit settlement and attorney payout using state data. We publish it online so Californians can see how the law really works.

Two years after the most recent attempt to reform PAGA, here is what the numbers show:

In 2024 — the year lawmakers passed what was meant to be a major overhaul — 1,806 lawsuits generated more than $1.6 billion in total settlements. Attorneys collected over $508 million of that. In 2025, settlements rose to 2,420 cases, with total payouts exceeding $2.2 billion and attorneys taking home $740 million. In just the first two months of 2026, there have already been 471 settlements and $114 million in attorney payouts.

In these same years, there were roughly 9,000 PAGA notices filed each year—meaning countless more PAGA cases were settled “off the books” by employers seeking to avoid crushing financial penalties.

That’s not an improvement; it’s a system that’s just getting bigger.

The 2024 reforms made some changes around the edges, but they have not moved the needle. The core problem, attorney fee incentives, was left untouched. PAGA still enables lawyers to file claims and maximize their payouts. Most PAGA lawsuits are settled through mediation, with little oversight and strong pressure to settle quickly.

As long as this law remains more profitable for lawyers than it is workable for businesses, the number of claims will keep rising.

The latest reform also failed to address the lack of education and support for employers navigating the state’s more than 1,100-page labor code. Every employer, no matter how small, is expected to get it exactly right. That might be manageable for a Fortune 500 company with a legal department. It is not reasonable, however, for the owner of a dry cleaner or a staffing firm with just 30 employees.

Take Wage Order 15, which governs household occupations such as senior caregiving and housekeeping. It was written by an agency that no longer exists, and 17 specific orders haven’t been updated since 2001. The rules are riddled with conditional exemptions that even experienced attorneys struggle to interpret. Without a legal team on retainer, employers can easily slip up — and when they do, trial attorneys are quick to pounce.

We hear from business owners who did right by their employees, only to open a certified letter one morning and find themselves facing a six-figure liability for a pay stub formatting mistake.

PAGA makes no meaningful distinction between bad actors and honest mistakes. That’s not enforcement. It’s a cash cow for law firms that have built their entire business model around filing claims.

The good news is the numbers are public. Anyone can see how many cases are filed, how much attorneys collect, and who the worst offenders are.

State officials have a chance to signal that California is serious about keeping job creators here, not driving them out. The businesses that built this state deserve a labor enforcement system that supports them and their employees. Making meaningful changes to PAGA is a good first step.

Tom Manzo is founder of the California Business and Industrial Alliance (CABIA)

Orange County Register

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Is California about to get serious about PAGA reform?

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