California’s Private Attorneys General Act gives workers the power to pursue civil penalties against employers for Labor Code violations on behalf of the state. When those claims arise, litigation can stretch on for years and carry significant financial exposure for everyone involved. PAGA mediation offers an alternative: a structured, confidential process where both sides can work toward resolution without the unpredictability of a courtroom.
Whether you are an employee with a wage claim or an employer navigating a PAGA notice, understanding how mediation fits into this process can help you make informed decisions early.
What Does PAGA Actually Allow?
PAGA was enacted under Senate Bill 796 and took effect on January 1, 2004. The California Legislature passed it in response to declining staffing levels at state labor enforcement agencies, authorizing employees to act as “private attorneys general” and collect civil penalties for Labor Code violations on behalf of the Labor and Workforce Development Agency (LWDA).
Under PAGA, a single aggrieved employee can bring a representative action covering wage and hour violations, missed meal and rest breaks, inaccurate wage statements, expense reimbursement failures, and other California Labor Code issues. Penalties under the default structure run $100 per employee per pay period for initial violations and $200 per employee per pay period for subsequent violations. Sixty-five percent of recovered penalties go to the LWDA, with the remaining 35 percent distributed to aggrieved employees.
The financial exposure in PAGA cases can be substantial, which is one reason why both sides frequently look to mediation as a path to resolution.
How the 2024 PAGA Reforms Changed the Landscape
In July 2024, Governor Newsom signed Assembly Bill 2288 and Senate Bill 92, making the most significant changes to PAGA since it was enacted. These reforms apply to PAGA notices filed on or after June 19, 2024, and they directly affect how cases are valued and resolved at the mediation table.
Key changes include:
Stricter standing requirements. A PAGA plaintiff must now personally have suffered each specific Labor Code violation they allege. This narrowed standing affects how broadly a claim can be framed.
Penalty caps for good-faith compliance. Employers who took “all reasonable steps” to comply before receiving a PAGA notice may have their penalties capped at 15 percent of the otherwise-applicable default amount. Employers who take those steps within 60 days of receiving a PAGA notice may qualify for a cap of 30 percent. Reasonable steps include conducting payroll audits, implementing written policies, and training supervisors.
Cure provisions for smaller employers. Beginning October 1, 2024, employers with fewer than 100 employees can submit a confidential cure proposal to the LWDA within 33 days of receiving a PAGA notice. If the LWDA determines the violations have been cured, the employee may not proceed with a civil action.
Court manageability authority. Courts can now limit the scope of claims at trial, which affects how much of a case actually needs to be resolved and how.
These reforms did not eliminate PAGA claims. They changed how penalties are calculated and how disputes are evaluated, making the analysis at mediation more nuanced than it was before.
What Happens in PAGA Mediation?
PAGA mediation brings the employee, employer, their respective attorneys, and a neutral mediator together to work toward a negotiated resolution. The mediator does not issue a ruling. Instead, they help both sides communicate, clarify the facts and law, assess the realistic range of outcomes, and explore terms that could resolve the dispute without further litigation.
A typical PAGA mediation session involves:
Pre-mediation preparation. Both sides exchange relevant information, including payroll records, timekeeping data, and documentation of compliance efforts. Attorneys prepare written mediation briefs outlining their positions and the strengths and weaknesses of the case.
Joint and private sessions. The mediator may bring both parties together for an opening session, then conduct separate caucuses with each side to explore settlement terms candidly.
Penalty analysis. Given the 2024 reforms, discussions often focus on whether the employer can demonstrate good-faith compliance, the scope of the alleged violations, and how courts might exercise manageability discretion. These variables significantly affect the settlement range.
Settlement terms. If the parties reach agreement, the terms are documented. Since PAGA settlements involve a public agency, the LWDA, any proposed settlement must also be submitted to the court for approval.
Since PAGA cases often involve dozens or hundreds of affected employees, the stakes at mediation are high and the factual and legal issues are layered. An experienced mediator who understands California wage-and-hour law and the post-2024 reform landscape can help the parties move past impasse and reach a result that holds up.
Why Choose Mediation Over Litigation for a PAGA Claim?
Litigation of a PAGA case can take years and generate significant legal fees for both sides. Mediation offers a faster and more controlled path, with several practical advantages.
Confidentiality is one. Mediation discussions are generally protected from disclosure, allowing both sides to speak candidly about their positions without creating a record that can be used against them later.
Cost is another. Even complex PAGA cases can often be resolved in one or two mediation sessions, compared to the extended timeline and unpredictable costs of taking a case through trial.
The 2024 reforms also created new incentives for early resolution. Employers who can document reasonable compliance efforts have a stronger argument for reduced penalties, and employees have a clearer picture of what a realistic recovery looks like. Both factors make mediation a productive place to have that conversation before litigation costs escalate.
For employment mediation and PAGA claims mediation, having a mediator who understands the technical details of California labor law and the post-reform penalty structure makes a concrete difference in how sessions are conducted and how often they result in resolution.
Working With Blue Sky Mediation Center
Blue Sky Mediation Center works with employers, employees, and their attorneys on California employment disputes, including PAGA claims, wage and hour disputes, and other matters. Sessions are conducted across California and Nevada, with locations serving Los Angeles, Orange County, San Francisco, Sacramento, and other areas. The center is focused on helping parties reach resolution efficiently, without the delays and costs that come with extended litigation.
Our mediator, Robert P. Mougin, is based in Encinitas, California, and brings focused experience to PAGA and employment mediation. To schedule a session, please contact us or reach our case manager directly at admin@blueskymediationcenter.com to set up an appointment.