Recent changes to the Private Attorneys General Act (PAGA) continue to reinforce a practical point for California employers: liability under PAGA is no longer just about whether a violation occurred, but also whether the employer can demonstrate it took “all reasonable steps” to comply. That showing can make a meaningful difference in penalty exposure. 

Penalty reductions happen where employers can document good faith, proactive compliance efforts. The key is not perfection, but preparation and consistency. 

What “All Reasonable Steps” Looks Like in Practice 

Employers should be able to point to a combination of policies, training, auditing and correction efforts, including: 

• Clear, compliant policies that accurately reflect current wage and hour requirements, including overtime, meal and rest periods, and paid sick leave.  

• Manager and payroll training to ensure those responsible for implementation understand how rules apply in real-world scenarios.  

• Regular payroll audits, particularly where compensation structures are more complex.  

• Prompt correction of errors, including issuing back pay where needed and documenting the fix.  

Documentation matters in defending PAGA claims. Employers should assume that they will need to affirmatively show what they did and when they did it.  

What Employers Should Do Now 

Employers should take a fresh look at their wage and hour compliance programs with an eye toward documentation and consistency. This includes updating policies, confirming that managers and payroll personnel are properly trained, and conducting targeted audits to identify and correct issues before they become systemic. Just as important, employers should memorialize these efforts, including any corrective actions taken, so they can demonstrate a clear, good faith compliance strategy if challenged. Taking these steps before receiving a PAGA notice will place employers in the best position to argue for maximum penalty reductions. Even after receiving a PAGA claim, taking “all reasonable steps” to identify and remediate issues specified in the notice may go a long way to reduce penalties.