The window for the 15% PAGA cap closes when an employee or their lawyer asks for records, not when the lawsuit does.
A request for records under Labor Code §226, §432 or §1198.5 usually comes before the PAGA notice. It arrives by letter or email, it is routine on its face, and it rarely looks like the start of anything. For the 15% cap, all reasonable steps have to come before the request or the notice, whichever arrives first (§2699(g)(1)). A court decides whether they were reasonable, and may go above the cap (§2699(e)(2)).
The Private Attorneys General Act (Labor Code §2698 et seq.) lets an aggrieved employee, one who personally suffered each of the violations alleged (§2699(c)(1)), sue for civil penalties on behalf of themselves and other current or former employees affected by the same violations. The 2024 reform (AB 2288 and SB 92) kept PAGA in force and tied the penalties to what an employer can show it did.
Why it matters to a California employer
Penalties run per aggrieved employee, per pay period:
- $100 by default (§2699(f)(2)(A)).
- $200 if a court finds the conduct malicious, fraudulent or oppressive, or if an agency or court found the same practice unlawful in the prior five years (§2699(f)(2)(B)).
- 65% goes to the Labor and Workforce Development Agency and 35% to the employees (§2699(m)). These penalties are separate from any wages and premiums owed.
The 2024 reform (AB 2288 and SB 92) links those penalties to what you can document:
- 15% cap if you took all reasonable steps to comply before receiving the PAGA notice, or before a records request under Labor Code §226, §432 or §1198.5 (§2699(g)(1)). The records request usually comes first.
- 30% cap if you took all reasonable steps within 60 days after the notice (§2699(h)(1)).
- No penalty for a violation you cure (correct it and make each affected employee whole), if you also meet either cap condition. Curing without meeting either condition limits the penalty to $15 per employee per pay period (§2699(j)).
The law rewards finding and fixing violations early, and being able to prove you did. The statute names four examples of reasonable steps (§2699(g)(2)):
- periodic payroll audits with action taken in response
- lawful written policies
- supervisor training on Labor Code and wage order compliance
- corrective action as to supervisors
MicroForensics™ keeps a dated, exportable record of all four. The audit, policy and training records speak to the cap. Worker sign-offs speak to whether breaks were taken.
The caps are not guaranteed. A court judges whether your steps were reasonable, looking at all the circumstances, including your size and resources. A court may also go above either cap if keeping to it would be unjust, arbitrary and oppressive, or confiscatory (§2699(e)(2)). A violation that happens despite your steps does not, by itself, prove you failed to take them (§2699(g)(2)). Without a record of the steps, there is nothing to show the court. No outcome is guaranteed; every matter turns on its facts.
The caps are not guaranteed. A court decides whether the steps were reasonable, and may go above either cap (§2699(e)(2)).
Request for personnel records
A court may award more than 15% or 30%.
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. No outcome is guaranteed; every matter turns on its facts.
Each step has to be shown, dated, and exportable.
Each of the four examples §2699(g)(2) names has to be shown — each one dated, and each one exportable. 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.”
LWDA recorded 8,846 PAGA notices in fiscal 2024–25.
LWDA’s own count, published with its proposed PAGA regulations, is 8,846 PAGA notices in fiscal 2024–25 — roughly 34 every working day. Source: LWDA, February 2026 (PDF). The full-year 2026 figure is not published yet, and we do not forecast it. Each notice starts a 60-day period, and the employer answers it from the records that existed on the day the notice arrived. What a cap would have saved in a given matter is arithmetic the statute does not support; only a court sets the figure.
PAGA civil penalties come on top of the wages and premiums owed.
Most of the money in a demand letter is owed directly to employees: unpaid break premiums (§226.7), unpaid wages at termination (§203), wage-statement errors (§226), and unreimbursed expenses (§2802). The §2699 civil penalty comes on top of that, split 65% to LWDA and 35% to employees. One record answers both, but not the same way: The attestation is contemporaneous evidence about meal and rest periods. Wage-statement errors and reimbursement claims are answered by the recurring payroll audit and the correction that follows it.
The damage isn’t only the settlement. It’s twelve to eighteen months of legal fees, your own time, 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). The worker sign-off is not on this list. The audit, policy and training records speak to the cap; worker sign-offs speak to whether breaks were taken. We build all four from your payroll and timekeeping data, starting in the records diagnostic.
From the journal
Free, thirty minutes. If it is worth doing, the next step is the records diagnostic, a fixed fee quoted on the call.
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.