The 15% cap doesn’t apply itself.
AB 2288 and SB 92 amended Labor Code §2699 in 2024. The reform kept PAGA in force and raised the documentary bar.
The cap is conditional, not automatic.
Penalties are capped at 15%if the employer can show “all reasonable steps” were taken beforea PAGA notice arrived — or before an employee’s records request, which often comes first — and at 30% if within 60 days after. Whether the steps were enough is the court’s call, on the totality of the circumstances. No documentation, no cap.
And it is a ceiling, not a floor.
The statute says penalties “shall not be more than” those percentages, and §2699(e)(2) lets a court award more — “notwithstanding the limitations set forth in subdivisions (g) and (h).” The cap is discretionary and the burden of showing the steps is the employer’s. Anyone selling you an arithmetic outcome is selling you something the statute does not say.
Reasonable steps must be evidentiary.
§2699(g)(2) names four examples — periodic payroll audits with action taken in response, lawful written policies, supervisor training on Labor Code and wage order compliance, and corrective action as to supervisors. Each one has to be shown, not asserted — with timestamps, signatures, and a chain of custody that survives discovery. The same subdivision is where the honest reassurance sits: “the existence of a violation, despite the steps taken, is insufficient to establish that an employer failed to take all reasonable steps.” Being imperfect does not forfeit the argument. Having no record does.
The volume is not small.
LWDA’s published notice counts record 8,846 PAGA notices in fiscal 2024–25 — roughly 34 every working day. The full-year 2026 figure is not published yet, and we do not forecast it. Each notice begins with a letter and a clock, and the employer’s side of it is assembled from records that either existed on that date or did not. We do not publish a dollar figure for what a cap would have saved. The statute does not support that arithmetic, and only a court sets the figure.
The window closes earlier than owners expect.
“Before” is measured from a records request under §226, §432, or §1198.5 — not from the lawsuit. The records request usually comes first. It arrives by email, it is routine on its face, and it rarely looks like the start of anything.
Request for personnel records
PAGA is the multiplier, not the whole bill.
Most demand-letter dollars are statutory penalties paid directly to employees — §226 wage statements, §203 waiting time, §226.7 meal and rest premiums, §2802 reimbursement — with §2699 civil penalties layered on top (65% to LWDA, 35% to employees). One record architecture reaches both surfaces, but not identically. The attestation is contemporaneous evidence about meal and rest periods. Facial wage-statement defects and reimbursement claims are answered by the recurring payroll audit and the correction that follows it — not by a signature.
The damage isn’t only the settlement. It’s twelve to eighteen months of legal fees, executive distraction, and the morale hit of a wage-theft accusation — usually for paperwork failures, not actual underpayment.
- Periodic payroll audits, with action taken in response
- dated findings
- Lawful written policies, disseminated to employees
- signed receipt
- Supervisor training on Labor Code and wage order compliance
- completion log
- Corrective action as to supervisors
- dated entry
Reasonableness is judged on the totality of the circumstances, taking into account the size and resources available to the employer.
Statutory text, Labor Code §2699(g)(2). Attestation is not on this list — our audit, policy, and training modules are the enumerated items, and the attestation does a different job. We build all four on your data in the audit.
Floburn Inc. is not a law firm and does not provide legal advice. Counsel advises Floburn on system design and does not represent your company; retain your own counsel for advice specific to your situation.