California Labor Code Compliance

PAGA Compliance Framework

Understanding how Verafi helps you maintain compliance with California meal and rest break laws.

Understanding PAGA
The Private Attorneys General Act and its impact on California employers

What is PAGA?

The Private Attorneys General Act (PAGA), California Labor Code §2698 et seq., allows employees to file lawsuits on behalf of themselves and other employees for Labor Code violations. PAGA deputizes employees as "private attorneys general" to enforce labor laws and recover civil penalties.

Why PAGA Matters

PAGA claims can result in substantial penalties: $100 per employee per pay period for initial violations, and $200 per employee per pay period for subsequent violations. With class-wide liability, penalties can quickly reach millions of dollars, making PAGA one of the most significant risks for California employers.

Common PAGA Violations

The most frequently alleged PAGA violations include:

  • Meal break violations (Labor Code §512)
  • Rest break violations (IWC Wage Orders)
  • Wage statement violations (Labor Code §226)
  • Overtime and minimum wage violations
  • Failure to reimburse business expenses
  • Failure to provide accurate wage statements
California Meal & Rest Break Requirements
Understanding the legal requirements Verafi monitors

Meal Breaks (Labor Code §512)

California law requires employers to provide:

  • First meal break: 30 minutes, no later than the end of the 5th hour of work
  • Second meal break: 30 minutes, no later than the end of the 10th hour of work
  • Meal breaks must be duty-free (employee relieved of all duties)
  • Employee must be free to leave the premises
  • Penalty: One hour of pay at the employee's regular rate for each violation

Rest Breaks (IWC Wage Orders)

Employees are entitled to:

  • 10-minute paid rest break for every 4 hours worked (or major fraction thereof)
  • Rest breaks should be in the middle of each work period when practicable
  • Rest breaks must be duty-free and uninterrupted
  • Penalty: One hour of pay at the employee's regular rate for each violation

Exceptions and Waivers

Limited exceptions exist for certain work shifts and industries. First meal period may be waived if the workday is 6 hours or less. Second meal period may be waived if the workday is 12 hours or less and the first meal period was not waived. All waivers must be in writing and voluntary.

How Verafi Ensures Compliance
Our comprehensive approach to PAGA risk management

Automated Violation Detection

Verafi analyzes your timekeeping and payroll data to automatically identify potential meal and rest break violations. Our algorithms check for late meal breaks, missed rest breaks, and proper premium pay for violations, flagging issues before they become PAGA claims.

Exposure Calculation

We calculate your estimated PAGA exposure based on identified violations, including both initial and subsequent violation penalties. This helps you understand potential liability and prioritize corrective actions.

Pattern Recognition

Our AI analyzes violation patterns to identify systemic issues, high-risk departments, locations, or managers. This enables targeted interventions to address root causes rather than individual violations.

Notice & Cure Tracking

PAGA requires employees to provide 65 days' notice before filing a lawsuit. We help you track notice periods, calculate cure requirements, and manage timelines to take advantage of the cure period when applicable.

Compliance Reporting

Generate detailed compliance reports for internal review or to share with legal counsel. Reports include violation summaries, exposure calculations, trend analysis, and recommended corrective actions.

PAGA Notice & Cure Period
Understanding the 65-day notice requirement and cure opportunities

Notice Requirement

Before filing a PAGA lawsuit, employees must provide written notice to:

  • The employer (via certified mail)
  • The California Labor and Workforce Development Agency (LWDA)
  • Notice must specify the Labor Code sections violated
  • Employer has 33 days to respond and cure violations

What "Cure" Means

To cure violations, employers must:

  • Pay all wages owed for meal and rest break violations
  • Fix the policies or practices that caused the violations
  • Implement corrective measures to prevent future violations
  • Document all remedial actions taken

LWDA Investigation

After receiving notice, the LWDA has 65 days to investigate. If the LWDA does not initiate an investigation within 65 days, the employee may proceed with a PAGA lawsuit. The LWDA rarely investigates, so the 65-day period is effectively a waiting period before litigation.

How Verafi Helps

Verafi tracks notice periods, calculates amounts owed for cure, generates cure calculations, and provides timeline management to ensure you meet all deadlines during the notice period.

Industry-Specific Compliance
Tailored compliance for different industries and work environments

Retail & Hospitality

High-volume, shift-based environments with frequent break violations. Verafi identifies patterns like understaffing leading to missed breaks, late meal periods during rush hours, and inconsistent break policies across locations.

Healthcare

Healthcare workers face unique challenges with patient care responsibilities. We monitor for on-duty meal periods that don't meet legal requirements, interrupted rest breaks due to emergencies, and 12+ hour shifts with missed second meal periods.

Manufacturing & Warehouse

Production environments with shift schedules and quotas. We track production pressure leading to skipped breaks, meal periods pushed past the 5-hour mark, and rest break timing issues during multi-shift operations.

Professional Services

Office environments where breaks may be overlooked. We identify working through lunch, no formal rest break structure, and exempt vs. non-exempt classification issues leading to break violations.

Enterprise Compliance Management
Scaling compliance across multiple locations and jurisdictions

Multi-Location Monitoring

Verafi provides centralized monitoring across all California locations, with location-specific compliance scores, comparative analysis between sites, and identification of high-risk locations requiring intervention.

Policy Consistency

We help ensure consistent break policies across your organization, identify policy deviations between locations, and standardize compliance practices while respecting operational differences.

Regional Managers & Oversight

Role-based access allows regional managers to monitor their locations while corporate compliance teams maintain enterprise-wide visibility and control.

Compliance Best Practices
Proactive strategies to minimize PAGA risk

Regular Audits

Conduct monthly compliance audits using Verafi to identify and correct violations before they become systemic. Review high-risk periods, locations, and employees.

Manager Training

Train managers on meal and rest break requirements, proper timekeeping practices, and the importance of compliance. Document all training provided.

Clear Policies

Maintain written policies that clearly explain break entitlements, timing requirements, and procedures for reporting violations. Distribute policies to all employees and obtain acknowledgment.

Timekeeping Systems

Use reliable timekeeping systems that track break compliance. Implement alerts for late meal breaks and integrate timekeeping data with Verafi for automated monitoring.

Legal Counsel

Maintain a relationship with employment law counsel who specializes in California wage and hour law. Review Verafi reports with counsel and develop remediation strategies collaboratively.

Staying Current with Regulatory Changes

California labor law evolves constantly through legislation, court decisions, and regulatory guidance. Verafi monitors these changes and updates our compliance algorithms accordingly.

We notify customers of significant legal developments that may affect their compliance obligations and provide guidance on implementing necessary changes.

Additional Resources

For more information about California labor law and PAGA compliance:

Need Legal Advice?

Verafi provides compliance software, not legal counsel. For specific legal questions about your compliance obligations or PAGA exposure, please consult with qualified employment law attorneys who specialize in California wage and hour law.