Modified text went out for comment on August 3, 2026. Nothing has been finally adopted. Here is what that means for an employer, why we are not publishing a reading of the modified text yet, and what does not change either way.
In February we published a walkthrough of the LWDA's first-ever proposed PAGA regulations. The short version of that post was: the proposal is procedural — notice content and form, cure mechanics, filer conduct, and agency review of settlements — and it does not interpret "all reasonable steps," set an audit cadence, or prescribe training or acknowledgment formats.
This is the status post. There are three facts in it.
The agency published modified text on August 3, 2026, with a 15-day comment period.
Nothing has been finally adopted as of this writing.
We have not published a reading of the modified text, and this post is not one.
The temptation in this business is to be first with an interpretation. There are three reasons we are not taking it here, and they are worth stating because they apply to everything else on this site.
Modified text is not final text. A 15-day comment period exists so that the text can change again. An analysis published against an intermediate draft is an analysis of a document that may not become the rule, and it acquires a life of its own — quoted back, relied on, and hard to retract once it has been forwarded to three people.
Our standard for this kind of writing is the primary source, read directly. Everything on this site that describes a statute or a regulation was read against the official text, not against a summary of it. We are not going to make an exception for a document because it is topical.
Nothing operational turns on it this month. Which is the substantive point, and the rest of this post.
An employer trying to decide what to do differently because of this rulemaking should understand what the framework rests on, because the rulemaking does not move any of it.
The reasonable-steps standard is statutory and unconstrued. Labor Code §2699(g)(2) enumerates its examples — periodic payroll audits with action taken in response to the results, lawful written policies, supervisor training on Labor Code and wage order compliance, and corrective action as to supervisors — and expressly makes the list non-exhaustive. Reasonableness is judged on the totality of the circumstances, taking into account the size and resources available to the employer. No California appellate court has yet said what satisfies the phrase, and the proposed regulations do not interpret it.
The caps still work the way they worked. Section 2699(g) and (h) reach PAGA civil penalties only — not the wages, the premiums, the §226 statutory penalties, or the fees. They are ceilings rather than floors: the statute says penalties "shall not be more than" the stated percentage, and §2699(e)(2) permits a court to exceed the limitations of those subdivisions notwithstanding them. The employer carries the showing.
And three things that were already true stay true. The 15 percent window still closes when a records request under §226, §432, or §1198.5 arrives, not only when a notice does — and the letter usually comes first. The post-notice pathways are still the ones SB 92 built, split by headcount at 100 employees, each of them a legal question for your counsel, not a menu. And which version of PAGA governs still turns on the date the notice was filed, not the date the complaint was.
Not a prediction. The February proposal is a published document we have already read; these are the two areas it covered. Whether the modified text keeps them, and in what form, is the part we are not going to guess at.
Notice form and content. The February proposal contemplated standardized notice forms carrying claimant-signed, fact-specific allegations. A notice that must state facts specifically is a notice that tells the employer more, earlier, about what is being alleged — which would change what the first counsel conversation can cover and what a cure proposal has to address.
Cure mechanics. Expanded procedure around the cure paths would change the shape of the post-notice exchange. It would not change what the exchange runs on, which is records that existed on the day the notice arrived.
That last sentence is the one to carry out of this post. Every pathway in the reformed statute — the cure proposal, the conference statement, the settlement submission — is a deadline-driven documentary exchange. Procedure determines the form and the timing. It does not determine whether the employer has anything to put in the envelope.
This is a watch item in our own research apparatus, which means a specific thing: when the final text is adopted, every published claim we make that touches it gets re-verified against the adopted text before the next deployment, and anything that no longer holds is fixed before it can mislead anyone.
We would suggest the same posture for an employer. Do not restructure a compliance program around a proposed regulation, and do not let anyone tell you a pending rulemaking creates an urgency the statute does not already supply. The statute supplies plenty. The records request that closes the 15 percent window has been arriving in employers' mail the entire time this rulemaking has been pending.
Where your records sit against the framework as it exists today is answerable now, and the discovery call is where we answer it. We will not tell you what the LWDA is going to do, because we do not know — and neither does anyone quoting the modified text at you.