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A worker died repairing a roof leak on a two-story house in Westchester on January 9, 2026. He fell about 24 feet and suffered fatal head injuries. Cal/OSHA’s August 3 news release (DIR 2026-62) says the crew was on that roof without required fall protection, without proper ladder-safety training, and without an on-site worker certified in first aid. Two of the three employers also failed to provide effective heat-illness prevention training. DIR did not name which two.

Three Los Angeles County roofing contractors were cited. Combined proposed penalties: $282,420. Two of the three appealed. A separate Bureau of Investigations file remains open. If you work roofs, bid against these shops, or you are family trying to make sense of a citation packet, this is how to read what Cal/OSHA actually said — and what you can do next.

What Cal/OSHA issued

DIR published these proposed penalties and classifications. It did not publish inspection numbers or the Title 8 section on each item. Do not invent those. Ask for the file.

• Atlas Building and Roofing, Inc. — $120,300 proposed: one willful-serious accident-related, three serious, two general. DIR notes prior noncompliance: willful-serious and serious roofing citations in 2025, and two serious roofing citations in 2023. Appealed.
• Atlas Roofing Company, Inc. — $113,750 proposed: one willful-serious accident-related, three serious, two general. Appealed.
• Roof-Top Construction, Inc. — $48,370 proposed: one serious accident-related, three serious, two general. DIR did not report an appeal.

Cal/OSHA treated each of the three as responsible for protecting workers on that job.

CSLB license #1057468 is the C-39 roofing license associated with Atlas Building and Roofing Inc. of West Hills (C-39 Roofing). Confirm current status on the CSLB public lookup before you rely on it — this draft does not treat a lookup as a finding that the firm was unlicensed on January 9, 2026. DIR listed Atlas Roofing Company, Inc. as a separate cited employer. Do not collapse the two names.

What the labels actually mean

General (Title 8 §334(b)): a safety-or-health violation specifically determined not to be serious.

Serious (Title 8 §334(c); Labor Code §6432): Cal/OSHA gets a rebuttable presumption if it shows a realistic possibility that death or serious physical harm could result from the actual hazard. Proving a standard was broken is not enough by itself. The employer can rebut by showing it did not know, and could not with reasonable diligence have known, of the violation.

Willful (Title 8 §334(e)): an intentional and knowing violation where the employer was conscious that what it was doing violated a safety law; or the employer knew an unsafe condition existed and made no reasonable effort to eliminate it. Willful-serious is both labels at once. That is what DIR put on the accident-related items issued to the two Atlas employers.

Accident-related (Labor Code §6319(d); Title 8 §336): the Division determined that death or serious injury, illness, or exposure was caused by a serious, willful, or repeated violation. The penalty is not reduced for good faith, history, or abatement credit — only for size of the business. Roof-Top’s accident-related item is classified serious, not willful-serious. None of this is a court verdict.

Citations on appeal are not final

An employer has 15 working days from receipt of the citation to contest it at the Occupational Safety and Health Appeals Board. DIR says the two Atlas employers have appealed. Until the Board issues a final order — or the employer withdraws, settles, or lets an item become final — those proposed penalties can be reduced, reclassified, or withdrawn. Employees may participate as third parties in an employer’s appeal, and may appeal the reasonableness of an abatement date. The employer must post notice of the appeal where employees will actually see it, and serve it on any employee who suffered a serious injury and on the representative of any employee who was killed.

The rule that should have been on that house

DIR’s description tracks Title 8 §1731, the residential-type roofing standard that took effect July 1, 2025. On slopes up to and including 7:12, employees must be protected from falling when the fall distance is 6 feet or more. On slopes steeper than 7:12, that protection is required regardless of height. The old 15-foot residential trigger is not the law anymore. Construction first aid is Title 8 §1512. Outdoor heat-illness prevention for construction is Title 8 §3395: water, shade, high-heat procedures at 95°F, and effective training before heat-exposed work starts.

What you can do next

1. Get the inspection file. File a Public Records Act request under Government Code Division 10 (commencing with §7920.000). The 10-day determination clock, and the optional 14-day extension for unusual circumstances, are in Government Code §7922.535. Use DIR’s online form, email [email protected], or go in person to a district office. Identify the employer legal names, the Westchester worksite, January 9, 2026, and the date range through the citation. Ask for citations, the inspection report, photographs, and appeal status. Also search OSHA’s public establishment search by company name and California.

2. File a Cal/OSHA complaint if the hazard is still on a job you can see. Anyone can file. A complaint from an employee or employee representative is “formal”; everyone else’s is “non-formal.” You do not need the Title 8 section number. You do need enough detail to find the hazard: employer name, address, height, slope, whether fall protection is actually in use, and who is on site. Call the district office for that zip code (8 a.m.–5 p.m., weekdays) or email via the zip-code locator. Workers can also call 833-579-0927, 9 a.m. to 7 p.m. weekdays, for a live bilingual representative. Your name is confidential unless you ask to be named. Serious and imminent hazards generally get an unannounced on-site inspection; lesser hazards may get a 14-day letter that must be posted.

3. If you get punished for speaking up, that is a different filing. Labor Code §6310 bars discharge or discrimination because you complained about unsafe conditions (to Cal/OSHA, another agency, your employer, or your representative), participated in a safety committee, reported a work-related fatality, injury, or illness, or asked for injury records. You are entitled to reinstatement and lost wages. Labor Code §6311 bars layoff or discharge for refusing work that would violate the Labor Code, a safety standard, or a safety order where that violation would create a real and apparent hazard to you or your coworkers. File with the Labor Commissioner under Labor Code §§6312 and 98.7. Current §98.7 gives you one year from the retaliatory act. You may also file a concurrent federal OSHA whistleblower complaint within 30 days. Call 833-526-4636.

4. Related worker tools. Unpaid wages, overtime, or missing meal and rest breaks go to the Labor Commissioner as a wage claim — not to Cal/OSHA. Keep your own time records and paystubs. If you need a plain-English walkthrough of a DLSE wage claim, the free Wage Theft Recovery kit at JusticePrompt.com is built for that filing.

High Hazard Unit

Cal/OSHA’s High Hazard Unit inspects employers with the highest rates of preventable injuries, illnesses, and workers’ compensation losses. Targeting can use the annual High Hazard Industry List (DART rates above 200 percent of the California private-sector average), workers’ compensation loss data, citation history, and other sources in Labor Code §6314.1.

FAQs

If the two Atlas citations are on appeal, can I still use them? Yes — as proposed Cal/OSHA findings, not as a final Board order. Quote the DIR release accurately, pull the file, and say the cases are appealed. Do not treat Roof-Top as appealed unless DIR or the Board says it is.

Can a family member file a complaint or request the records? Yes. Anyone who believes a safety standard is being violated, or that a danger threatens physical harm, can file a complaint. Family and the public can also request inspection records under the Public Records Act. Immigration status is not a condition of protection.

Sources

DIR 2026-62, https://www.dir.ca.gov/DIRNews/2026/2026-62.html. Title 8 §§334, 336, 1512, 1731, 3395. Labor Code §§6310, 6311, 6312, 6314.1, 6319, 6432, 98.7. Government Code §§7920.000–7931.000, 7922.535. Complaint: https://www.dir.ca.gov/dosh/Complaint.htm. District locator: https://www.dir.ca.gov/asp/doshzipsearch.html. PRA: https://www.dir.ca.gov/dosh/pra-Requests.html and https://www.dir.ca.gov/PRAR/PRARForm.asp. OSHAB: https://www.dir.ca.gov/OSHAB/oshabappealpro.html. High Hazard Unit: https://www.dir.ca.gov/dosh/High-Hazard-Unit.html. Wage claims: https://www.dir.ca.gov/dlse/howtofilewageclaim.htm. OSHA establishment search: https://www.osha.gov/ords/imis/establishment.html. CSLB public lookup (confirm #1057468 on the site; do not treat this draft as a live license-status finding): https://www.cslb.ca.gov/OnlineServices/CheckLicenseII/CheckLicense.aspx. JusticePrompt.com wage-theft kit (self-help only).

Educational use only — not legal advice, not a filing, and not a final-order finding. Proposed penalties can change on appeal. Verify current statute, license, and docket status before you act.

Dolly Parton’s classic anthem about a thankless job and an unfair boss wasn’t just a hit — it was practically a workplace compliance checklist. Nearly 45 years later, California employers are still tripping over the same issues. Here’s what the song teaches HR professionals and business owners today.

1. “Working 9 to 5, What a Way to Make a Living”

An eight-hour workday sounds simple, but in California, it isn’t. California requires overtime (1.5x pay) for any hours worked over 8 in a single day, not just over 40 in a week, like federal law. A standard 9-to-5 shift only avoids daily overtime liability if it includes a genuine, uninterrupted 30-minute off-duty meal break. If employees are working through lunch, staying reachable, or answering a quick Slack message on their meal break, that would require an employer to pay for the time worked, as well as a meal-break premium. And can cause unplanned overtime. Build real break enforcement into your timekeeping practices, not just a policy on paper.

2. “They Just Use Your Mind and They Never Give You Credit”

Under a work-for-hire or IP assignment agreement, work created by employees generally becomes company property, but California Labor Code Section 2870 requires a specific carve-out. Inventions an employee develops entirely on their own time, without company equipment or resources, and unrelated to the company’s business or the employee’s assigned duties, may legally belong to the employee, not the company. An IP assignment clause that doesn’t reference this exception is overbroad and unenforceable. Review your employment agreements and IP policies to make sure they’re drafted correctly.

3. “You Spend Your Life Putting Money in His Wallet”

California has some of the strictest wage theft protections in the country, and certain deductions and withholdings are simply off-limits. Improper deductions from wages (for things like breakage, cash shortages, or uniforms in most cases), any retention of employee tips, and failure to reimburse necessary business expenses are all common compliance failures. These issues often surface in audits or single-employee complaints long before they become class actions, so it’s worth reviewing payroll practices proactively rather than reactively.

4. “You’re in the Same Boat with a Lotta Your Friends”

California’s pay transparency laws require employers to include pay scales in job postings and to provide the pay range for an employee’s current position upon request. Beyond the posting requirement, employers must also maintain job title and wage history records for each employee for the duration of employment plus three years afterward. Review your job postings, pay bands, and record-keeping now, before a request or an audit forces the issue.

5. “It’s Enough to Drive You Crazy”

Mental health leaves have skyrocketed the past few years and employers need to be mindful of the protections that may need to be extended to employees. Under the FMLA, CFRA, and the ADA, an employee experiencing anxiety, depression, or another condition related to or aggravated by work stress may be entitled to a leave of absence as a reasonable accommodation. Employers need a genuine interactive process in place for these requests, need to request appropriate substantiating documentation and should train managers and HR to recognize accommodation requests even when an employee doesn’t use those exact words.

Rest in peace, Dolly.

Think that negotiations between MLB owners and players are simply millionaires battling each other? Think again. The Los Angeles Times reports: “But the two sides aren’t equal as a general thing. The minimum major league salary this year is $780,000. That’s a significant advance over 2010, when it was $400,000 (about $616,000 in today’s money) and…

Source

As we move through 2026, it remains the perfect time for California employers to return to the fundamentals. With evolving employment laws, local ordinances, aggressive enforcement, and high volumes of wage-and-hour and PAGA claims, getting the basics right continues to separate smooth operations from costly litigation and penalty exposure.

The 2024 PAGA reforms remain central: employers that can document “reasonable steps” to comply with the Labor Code before (or promptly after) a PAGA notice can significantly cap penalties. Routine audits of core wage-and-hour practices are one of the clearest ways to build that record.

This article focuses on five common wage-and-hour issues California employers should routinely audit. Whether you are scaling a team or managing a long-standing workforce, use this as a practical checklist to stay compliant and protect the business.

1. Payroll Compliance: The Foundation

Payroll is more than issuing paychecks on time. Employers must ensure systems and practices meet California’s detailed requirements:

• Established Workweeks and Paydays: Workweeks must be clearly defined, and paydays consistently scheduled within the required timelines.
• Wage Statements: Itemized wage statements must meet all statutory requirements under Labor Code section 226. Common problems include missing or inaccurate hours worked, incorrect rates, omitted employer name/address, or incomplete information.
• Sick Leave Accruals and Balances: Each pay period must include written notice of available paid sick leave (or paid time off provided in lieu of sick leave) on the wage statement or in a separate writing provided on the payday, as required by Labor Code section 246(i). State minimums (generally 40 hours/5 days) still apply, and many local city and county ordinances impose additional or more generous requirements—employers must follow the most protective applicable rule.
• Vacation Tracking: Vacation policies must be documented, accurately tracked, and accrued benefits properly reflected. Unused vested vacation is wages that must be paid out on termination.

2. Wages and Deductions: Avoiding Costly Errors

Errors in deductions or reimbursements frequently generate penalties and PAGA exposure.

• Permitted Deductions: California allows only a narrow list of deductions. Err on the side of caution and consult counsel before withholding anything beyond taxes, authorized benefits, or other specifically permitted items.
• Expense Reimbursement: Employees must be reimbursed for necessary work-related expenses (uniforms, personal cell phone use for work, mileage, tools, etc.) under Labor Code section 2802.
• Final Paychecks: On termination (voluntary or involuntary), final pay must include all earned wages and accrued but unused vacation and must be provided within the strict timelines required by California law.

3. Employee Classification: Exempt vs. Nonexempt (and Independent Contractors)

Misclassification remains a top litigation trigger.

• Exempt Status Review: Duties and salary must satisfy California’s specific tests. Titles alone never determine exemption. As of January 1, 2026, the minimum salary for the executive, administrative, and professional exemptions is generally $70,304 annually ($1,352 per week)—twice the statewide minimum wage of $16.90 per hour. (The statewide minimum wage is scheduled to rise to $17.40 on January 1, 2027, which will further increase the exempt salary threshold.) Local minimum wages and industry-specific rates (fast food, healthcare, etc.) may also affect the analysis. Re-test classifications regularly.
• Independent Contractors: Continue to apply the ABC test under AB 5 and related law with caution. True independent contractor status remains difficult to establish in many common arrangements.

4. Timekeeping: Precision Prevents Problems

Timekeeping issues remain among the most frequently litigated wage-and-hour claims.

• Overtime Tracking: Nonexempt employees must be paid correctly for all overtime (daily after 8 hours, weekly after 40, seventh-day rules, etc.). Policies should clearly prohibit unauthorized off-the-clock work.
• Training Managers: Managers must be trained to identify and prevent off-the-clock work and understand the consequences of ignoring or encouraging violations. Documented training supports “reasonable steps” under the reformed PAGA.
• Time Rounding: If rounding is used, the policy must be neutral and not result in underpayment over time. Meal-period time punches cannot be rounded (Donohue v. AMN Services). Whether California employers may continue to use neutral time-rounding policies for total hours worked—especially when electronic systems already capture time to the minute—is under review by the California Supreme Court in Camp v. Home Depot. Employers are strongly cautioned about relying on rounding given the evolving case law and technological ability to record exact time. Paying for actual time recorded is the safer approach in most cases.

5. Meal and Rest Breaks: Small Breaks, Big Liability

Meal and rest break violations remain a primary driver of class actions and PAGA claims.

• Handbook and Reminders: Policies must be clearly documented in the handbook and regularly communicated to employees.
• Timely Breaks and Premium Pay: Breaks must be timely provided. Missed, late, or short meal or rest periods require premium pay (one hour of pay at the regular rate) that is properly recorded and shown on wage statements.
• Recordkeeping and Training: Employees should record meal breaks. Managers must be trained to monitor compliance, address issues promptly, and escalate problems. Time records showing noncompliant meal periods create a rebuttable presumption of violations.

Under the 2024 PAGA reforms, employers that can prove they took “reasonable steps” to comply before receiving a PAGA notice may significantly cap penalties (as low as 15% in appropriate cases). For meal and rest breaks, this typically means documented regular audits of break compliance, clear written policies, supervisor training with records retained, prompt corrective action when issues surface, and follow-up verification that fixes were implemented.

For a deeper discussion of what “reasonable steps” actually look like in practice in 2026—and how they can reduce both PAGA and broader employment litigation exposure—see What “Reasonable Steps” Really Mean in 2026.

Final Thought: Routine Audits Are a Must

Employment laws and enforcement priorities do not stand still—and neither should compliance practices. Schedule at least a semiannual (or more frequent) audit of these core areas, or partner with employment counsel to review them. Document the steps you take. Under the 2024 PAGA reforms, a well-documented program of reasonable compliance efforts can materially reduce penalty exposure.

A proactive approach in 2026 reduces risk, strengthens operations, and demonstrates a genuine commitment to treating employees fairly while protecting the business.

Join us for an upcoming webinar:

On Thursday, August 27 from 10:00 AM – 11:00 AM, Harri and Zaller Law Group will present “All Reasonable Steps”: The New Standard That Decides Who Wins a PAGA Claim. California rewrote the rules of PAGA—the employers who come out ahead in 2026 won’t be the ones who avoid every violation; they’ll be the ones who can prove they built the systems to catch and fix them. We’ll break down the reform (AB 2288 and SB 92), how courts and the LWDA evaluate “reasonable steps,” the four pillars of a defensible program (audits, policies, training, and accountability), what to do in the 60-day window after a notice arrives, and what the 2026 filing landscape signals for what’s next. Register now and get ahead of the reasonable-steps standard before it gets ahead of you.

The post Back to Compliance Basics: A Practical 2026 Checklist for California Employers appeared first on California Employment Law Report.

With summer coming to an end, now is a good time for employers and HR Departments to review training requirements and plan accordingly. Below are some helpful tips.

Workplace Violence Prevention Plan: Most California employers needed a written workplace violence prevention plan (WVPP) as of July 1, 2024.  Every employee covered by the WVPP — including supervisors and managers — must receive training at least annually, when the WVPP is first established, when new employees are assigned, and when new workplace violence hazards are identified.

Indoor and Outdoor Heat Requirements: Both require written Heat Illness Prevention Plan (HIPP) specific to each worksite. Training is mandated for both workers and supervisors. This is required for all indoor work areas where temperature equals or exceeds 82 degrees Fahrenheit when employees are present.  Does NOT apply to teleworking employees. The basic test of training is its effectiveness. Cal/OSHA evaluates compliance by examining both content and how it is presented.

AB 1803: Anti-Hate Speech Training in Workplace Harassment Programs: Would require employers with five or more employees to include anti-hate speech training as part of their existing sexual harassment and abusive conduct prevention programs.  Under existing law, employers with five or more employees must provide at least two hours of training to supervisory employees and at least one hour to non-supervisory employees, once every two years.  AB 1803 would not create a standalone, separate anti-hate speech training obligation; it would add anti-hate speech as another component woven into that existing training framework, alongside the current requirements covering abusive conduct, gender identity, and sexual orientation.  AB 1803 does not define “hate speech.”

Take Away:  If enacted, update training curricula to include anti-hate speech content, ensure trainers are qualified to address hate-related harassment, maintain records of training compliance, and assess whether current programs meet the expanded requirements.  If it passes, it is effective January 2028 so employers can make adjustments  i.e., update harassment training and prevention materials accordingly.  Bill Text – AB-1803 Employment: sexual harassment training and education: anti-hate speech training.

This is the first of three posts where we will flag bills to watch as we head into 2027.

School is back in session! Let’s teach by example that shopping union-made is one of the best ways to support good jobs. Use our list below to make your back-to-school shopping a little easier. Happy shopping from all of us at Labor 411 Folders, Notebooks, and More ACCO brands (CWA) Five Star Reinforced Filler Paper…

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San Francisco has expanded its Fair Chance Ordinance protections. In this episode of California Employment News, Weintraub Tobin shareholders Shauna Correia and Meagan Bainbridge explain what employers need to know about the new restrictions on certain out-of-state arrests and convictions and the steps employers should take now to comply.

Watch this episode on the Weintraub YouTube channel or listen to this podcast episode here.

Getting served with a wage and hour class action or PAGA lawsuit is one of the worst days a California business owner or executive can have. The complaint typically alleges nearly every wage and hour violation in the Labor Code, claims to be brought on behalf of every employee you have had over the last four years, and threatens penalties that can look like an existential number. I have written before about the immediate action items after being named in a PAGA or class action lawsuit, but this week I want to step back and address something more fundamental: what executives need to understand about how these cases actually work, and how to be an informed participant in your own defense.

That last point is the theme of this article. Too many employers hand the case to their lawyer and passively wait for updates and invoices. These cases are defensible, and the decisions made in the first 60 to 90 days often determine the outcome. You have a say in those decisions — but only if you understand the framework. Here are five things every business facing one of these lawsuits needs to know:

1. Understand how class actions and PAGA cases work — and the difference between the two.

Executives do not need to become procedural experts, but they do need a working understanding of the two vehicles plaintiffs’ lawyers use, because the defenses, the exposure, and the settlement dynamics are different for each. Many complaints assert both, and treating them as one undifferentiated lawsuit is a mistake.

A class action is a procedural device that allows one or more employees to sue on behalf of a larger group of “similarly situated” employees. The critical battleground is class certification: the plaintiff must convince the court that the claims can be tried on a class-wide basis with common proof, and cases can be won or lost at this stage — as I explained in my discussion of the Allison v. Dignity Health decertification decision. Class claims seek the underlying unpaid wages and related damages, and can reach back four years under California’s unfair competition law. For a refresher on the basics, my earlier article on five common questions about class actions every employer should understand still holds up.

A PAGA action is a different animal. Under the Private Attorneys General Act, a single “aggrieved employee” can step into the shoes of the state and seek civil penalties — not wages — on behalf of all allegedly aggrieved employees, with 65% of the penalties going to the State of California and 35% to employees. There is no class certification requirement, which is a large part of why plaintiffs’ firms favor PAGA, and the statute of limitations period is generally one year. The stakes and mechanics of PAGA are worth understanding in detail, as are the penalty caps created by the June 2024 reform — 15% if the employer took all reasonable steps toward compliance before receiving the PAGA notice, and 30% if it takes them within 60 days after — which I covered in my article on key action items under the PAGA reform law. Why does the distinction matter to an executive? Because the leverage points differ: class claims can be defeated or narrowed at certification and can be sent to arbitration, while PAGA claims turn on penalty caps, manageability arguments, and the reasonable-steps defenses. A defense strategy that does not distinguish between the two is not a strategy.

2. Know your realistic liability early — and do not assume you need expensive experts to get there.

The single most important thing you can do as an executive is insist that your defense counsel conduct a realistic exposure analysis early in the case — not on the eve of mediation a year and a half later. That analysis should answer concrete questions: What do our time and payroll records actually show? What are our meal break compliance rates? How many pay periods and workweeks are at issue? Which claims have real exposure, and which are boilerplate? You cannot make intelligent decisions about early mediation, arbitration strategy, or litigation budgets without those answers, and you should expect your counsel to walk you through them — this is a business decision, and you have a say in it.

Here is where many companies waste money: they assume this analysis requires retaining an expensive testifying expert at the outset of the case. It does not. A testifying expert may become necessary if the case proceeds toward class certification or trial, but you do not need one to analyze your own time records and calculate compliance rates in the first months of the case. This is exactly the kind of work we built Scaled Comp to do — it is why I founded the company — analyzing time and payroll data to produce meal break compliance rates and exposure models at a fraction of the cost of an expert. Whatever tool your counsel uses, the point is the same: the data exists in your own records, the analysis can be done early and affordably, and an employer who knows its actual compliance rates negotiates from knowledge while everyone else negotiates from fear.

3. Understand your arbitration agreement — its enforceability, its class action waiver, and how many employees actually signed it.

For many employers, the arbitration agreement is the single most important document in the case. Since the U.S. Supreme Court upheld arbitration agreements with class action waivers in the employment context, a well-drafted agreement can take the class claims out of court entirely and require the named plaintiff to arbitrate individually. And under the framework following Adolph v. Uber Technologies, the plaintiff’s individual PAGA claim can be compelled to arbitration as well, with the representative component stayed in the meantime — a sequencing that fundamentally changes the settlement dynamics of the case.

But three questions need answers in the first weeks of the case, not months in. First, is the agreement enforceable? Courts continue to scrutinize these agreements closely, and drafting details matter — the Ninth Circuit’s decision in O’Dell v. Aya Healthcare Services is a recent reminder of how enforceability fights play out. Second, does it contain a valid class action waiver? An agreement without one may accomplish far less than you think — and a poorly drafted agreement can get you more than you bargained for. Third — and this is the one employers almost never know off the top of their head — how many current and former employees in the proposed class actually signed it? If 95% of the workforce signed, the realistic class shrinks dramatically and your leverage increases accordingly. If the rollout was inconsistent and only half signed, that is a very different case. Get the signature count early; it drives everything from the motion to compel strategy to the settlement number.

4. Understand what cases like yours actually settle for — and do not rely on anyone’s gut feeling.

At some point in nearly every one of these cases, the conversation turns to settlement, and the first question every executive asks is: what do cases like this settle for? Do not accept “in my experience, these cases usually settle around…” as the answer. The data exists. As I detailed in my mid-year review of the 2026 PAGA and class action settlement data, we are now tracking thousands of settlements pulled from public filings and court records through Scaled Comp, and the numbers tell a much more precise story than gut feel ever could.

The key is comparing apples to apples. The headline settlement amount tells you very little — what matters is the dollars per workweek for class claims and dollars per pay period for PAGA claims, benchmarked against settlements involving similar claims, similar industries, and similarly sized workforces. Armed with genuine comparables, you can evaluate whether a mediator’s proposal is in the market range or an outlier, and your counsel can make a data-backed argument for why your case should resolve below the median — because your compliance rates are strong, because your arbitration coverage is high, or because the plaintiff’s theory is weak. This is another analysis Scaled Comp performs, and whether you use our data or another source, insist that any settlement recommendation you receive comes with comparable settlements attached. You would not price any other multi-hundred-thousand-dollar business transaction on instinct; do not price this one that way either.

5. Understand the settlement terms — and know which ones are negotiable.

Finally, when a settlement does come together, the total dollar figure is only the beginning of the negotiation. The structure and terms of the agreement can shift meaningful value, and executives should understand which levers exist rather than treating the long-form agreement as boilerplate. I walked through many of these in detail in my recent article on five things California employers should understand about a PAGA settlement, and the same discipline applies to class action settlements.

A few examples of what is on the table: the scope of the release (what claims and what time period are actually being released, and who is covered); the allocation of the settlement between class claims and PAGA penalties, which affects both the release and the portion paid to the state; whether the settlement is non-reversionary or whether unclaimed funds return to the company; the payment schedule, including whether the settlement can be paid in installments; the treatment of employer-side payroll taxes; and the mechanics of the workweek or pay period caps and escalator clauses that protect you if the class turns out to be larger than represented. None of these terms negotiate themselves. An executive who understands the framework can push counsel on each of them — and the difference between a well-negotiated agreement and a signed-as-drafted one is real money.

The bottom line: a wage and hour class action or PAGA lawsuit is a serious event, but it is a manageable one — and the employers who fare best are the ones who engage as informed participants rather than passive check-writers. Understand the vehicles being used against you, demand a data-driven liability analysis early, know exactly where your arbitration agreement stands, benchmark any settlement against real comparables, and negotiate the terms — not just the number. Do those five things and you will have taken control of the case instead of letting the case take control of you.

The post Five Things Businesses Need to Know About Defending a Wage and Hour Class Action and PAGA Lawsuit appeared first on California Employment Law Report.

Beginning January 1, 2027, California’s statewide minimum wage will increase to $17.40 per hour.

The minimum wage increase also affects the minimum salary an employee must earn to meet part of the test for exemption from overtime requirements.

$17.40 x 2 x 40 hours per week x 52 weeks per year = $72,384

Accordingly, a salaried exempt employee must earn an annual salary of at least $72,384 to meet the salary threshold for exemption. In addition, employees must also satisfy the duties and other requirements applicable to the specific exemption.

Employers must also ensure compliance with Labor Code 226, including listing employees’ wage rates on their pay stubs. Remember, many California cities and counties have local minimum wage rates that are higher than the state rate. Where applicable, employers must comply with the higher local rate for hourly employees.

At our recent masterclass, “Exiting with Confidence: Best Practices for Lawful Terminations and Litigation Prevention,” Anne McWilliams, Caylee Scott, and I went back to basics on one of the highest-risk moments in the employment relationship: the termination. We debated whether a back-to-basics topic would draw interest, but preparing for it reminded me why it is worth revisiting — the forms, the severance rules, and the practical landscape around terminations keep changing, and a process that was compliant a few years ago may not be today.

Two themes ran through the entire presentation. First, the obligations are immediate: the moment you end the relationship, the clock starts running on final pay and required notices. Second, treat the employee with respect. An employee will rarely like the decision in the moment, but an employee who is treated with dignity, paid everything owed on time, and handed a clean set of paperwork is far less likely to spend the drive home calling a plaintiff’s lawyer. Here are five key issues from the masterclass that every California employer should have dialed in:

1. Document the true reason for the termination — and do not sugarcoat it.

It sounds simple, but it is remarkable how often litigation arrives and there is no documentation of the reason for the termination. If the termination is for cause — performance, behavior, a policy violation — say so and document it that way. Do not take the easy route and call it a “layoff” to soften the conversation. That is the employee who sues, and now the company’s real defense is not documented anywhere, the paperwork says something different, and the shifting explanation becomes a credibility problem that a plaintiff’s lawyer will use to argue pretext.

Be concrete. “Bad attitude” in a file means nothing. Three documented instances where the employee talked back to a supervisor during coaching, called a coworker a name, or made an inappropriate comment in a meeting tells a story a jury can follow. If a written policy was violated, identify the specific policy, the key dates, and the prior coaching or discipline. And your handbook should be reviewed annually so the conduct you are terminating for is actually addressed in your policies — though keep in mind you do not need a written policy for every conceivable infraction to terminate for misconduct.

Before the termination is final, run a red-flag audit of the entire personnel file. Has the employee recently complained about wage and hour issues? Recently returned from a protected leave? This matters more than ever: California law now creates a rebuttable presumption of retaliation when an employer takes an adverse action within 90 days of an employee engaging in certain protected activity. The presumption can be rebutted — but what rebuts it is the contemporaneous documentation in your file. If the timing looks bad, that is exactly when to get advice of counsel before pulling the trigger. Also document who made the termination decision: if the same person who hired the employee is the one terminating them, the “same actor” inference can be a helpful defense.

2. Have the end-of-employment packet ready — four documents are critical.

Just as employers use a new-hire packet, we recommend building a standing end-of-employment packet, because California requires certain documents to be provided at termination.

First, the Notice to Employee as to Change in Relationship, required under the Unemployment Insurance Code. It applies to terminations, layoffs, and leaves of absence (not voluntary quits or promotions), and it must be given at the time of the termination. Critically, the reason listed on this form must match what you tell the employee and what is in the file — an inconsistency here creates a presumption against you in litigation.

Second, the EDD’s “For Your Benefit” pamphlet explaining California’s unemployment insurance programs. It runs over twenty pages, and you are permitted to email it to the employee rather than printing it every time — just think through your distribution method in advance.

Third, the applicable health coverage continuation notice — a federal COBRA notice for employers with 20 or more employees, or a Cal-COBRA notice for employers with 2 to 19 employees. Your health insurance carrier typically prepares these; you do not need to reinvent the wheel, but you do need to confirm they actually go out.

Fourth, the HIPP notice issued by the California Department of Health Care Services regarding the Health Insurance Premium Payment program — a state form, not to be confused with federal HIPAA. This is the one employers forget most often, so build it into the packet.

Beyond these documents, employers should consider other optional documents, such as: a termination letter clearly stating the reason for the separation, and a final-pay acknowledgment form itemizing everything included in the final check, which the employee signs to confirm timely payment. If the employee refuses to sign, do not force the issue — give them the documents and the final pay anyway, and note on your copy that it was presented and the employee declined to sign.

3. Final pay is due immediately — and “final wages” means more than you think.

The timing rules are simple, but they are the most common compliance failure we see. For a termination or layoff, all final wages are due immediately, at the time and place of termination. For an employee who quits with at least 72 hours’ notice, final pay is due on the last day; with less notice, within 72 hours of the notice of quitting.

Final wages include everything owed and calculable at separation: earned regular and overtime wages, all accrued but unused vacation and vested PTO (which California treats as earned wages), commissions and bonuses to the extent they can be calculated, and unreimbursed business expenses. Accrued paid sick leave is not paid out at separation — but remember it must be reinstated if the employee is rehired within a year. If a commission or bonus has not yet vested and cannot be calculated, advise the employee in writing that it will be paid when calculable.

The penalty for getting the timing wrong is severe: waiting time penalties of one full day’s wages for each day the final check is late, up to 30 days. For an employee earning $200 per day, a check that is 20 days late generates a $4,000 penalty — and untimely final pay is a favorite add-on claim in class and PAGA actions precisely because it is so easy to prove. A few practical traps from the masterclass: a direct deposit authorization signed at hire is not valid for the final check — you need a fresh written authorization to direct deposit final wages. If the employee asks you to mail the check, get that authorization in writing with the address; the check is then deemed paid on the date of mailing. And do not forget the reporting time pay trap — if you bring an employee in for a scheduled shift and terminate them at the start of it, you owe reporting time pay (generally half the scheduled shift, no less than two and no more than four hours). The cleanest approach for an hourly employee: prepare the final check the day before and simply pay for the full final day, rather than trying to predict exactly when the meeting will end.

4. Conduct the meeting the “Moneyball” way — and assume you are being recorded.

We opened the masterclass with the viral video of an employee who, knowing her termination was coming, recorded the meeting and posted it online — what I have been calling “TikTok terminations.” California is a two-party consent state, so recording a confidential conversation without everyone’s consent is unlawful and likely inadmissible — but that will not keep the clip off the internet. The practical rule: conduct every termination meeting, especially remote ones, as though it will be played back later. Be professional, be consistent, and never say anything you would not want a jury or the internet to hear. (And a note on a question we get more and more: should the employer record the meeting itself, with everyone’s consent? My thinking has shifted — much like police body cameras, your own accurate recording can protect you if your process is done right.)

The most damaging moment in that video was the answer to “why am I being let go?” The company representatives did not have the reason ready and offered to circle back later with data. Do not let that happen. Have the reason locked down before the meeting, state it, and stick to it. This is where the Moneyball approach comes in: in the movie, Billy Beane teaches his young assistant how to cut players — keep it direct, deliver the decision, avoid over-explaining and over-apologizing, and do not get drawn into a debate. The decision has been made; the meeting is to deliver it, not to relitigate it. That said, do not swing to the other extreme and be robotic about it — this is a hard, human moment, and handling it with dignity is one of the most cost-effective forms of litigation prevention there is. Have a second management witness present who takes notes, so the person delivering the news can stay engaged with the employee. And train for it: role-play these meetings with your managers before they ever have to conduct one, using videos like the one we reviewed as training material. How would your manager answer “why am I being let go?” Find out in a practice session, not in a recorded meeting.

5. Get the severance agreement right, keep the right records, and work from a checklist.

Severance is not required under California law, but when you pay an employee anything beyond what is owed in final wages — whether to mitigate risk on a difficult termination or to recognize a long-term employee in a layoff — get a release of claims in exchange. A properly drafted release covers all claims, known and unknown, through the date of signing, and it is worth obtaining even for a modest payment. There is no set formula for the amount; one to two weeks of pay is common for hourly employees, but it varies with tenure and risk.

The drafting rules keep changing, which is why your template needs regular updating. For employees 40 and older, releasing a federal age claim requires giving the employee 21 days to consider the agreement and 7 days after signing to revoke — which means do not pay the severance until the revocation period expires, and explain that timing to the employee up front. Separately, California now requires giving employees at least five business days to consider a severance agreement and written notice of their right to consult an attorney. An old template can leave you having paid the money without a valid release.

Finally, records and process. Keep payroll records for at least four years — the Labor Code requires less, but wage claims can reach back four years, and never rely solely on a payroll vendor to store them; download and maintain your own copies, because switching vendors can mean losing access precisely when a lawsuit needs them. Personnel files should likewise now be kept for at least four years after separation. Establish a strict reference protocol — verify dates of employment and job title, nothing more, through one designated person — to avoid defamation and privacy claims. And put all of it on a written termination checklist: reason documented, red-flag audit done, final pay calculated (including vacation, commissions, and any reporting time pay), required notices assembled, property return and system access handled. A termination is an emotional, high-pressure event for everyone in the room, including the manager conducting it. A checklist built in advance is what keeps a hard conversation from becoming an expensive one.

Terminations will never be easy, but they can be clean. Document the honest reason, hand over the required paperwork, pay everything owed on time, deliver the decision directly and with dignity, and paper the exit properly. Do those five things consistently and you have turned one of the riskiest events in the workplace into one of your best-defended ones.

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