Construction Industry PAGA Exemption Extended Until 2038

Gov. Gavin Newsom has signed Assembly Bill 1034, which extends the exemption from the California Private Attorneys General Act (PAGA) for certain employees in the construction industry until Jan. 1, 2038.

This extension applies to employees in the construction industry who are covered by a collective bargaining agreement (CBA) that meets specific conditions, including:

• Expressly provides for wages, hours of work, and working conditions of employees.
• Provides premium wage rates for all overtime worked.
• Provides a regular hourly pay rate of not less than 30% more than the state minimum wage.

To qualify, the CBA must prohibit all the violations of the labor code that are redressable pursuant to PAGA and provide for a grievance and binding arbitration process to redress those violations. The CBA must also expressly waive PAGA’s requirements in clear and unambiguous terms and authorize the arbitrator to award any and all remedies available under the California Labor Code, with the exception of penalties that would otherwise be awardable to the state Labor & Workforce Development Agency.

Shannon Bettis Nakabayashi is an attorney with Jackson Lewis in San Francisco. Martin P. Vigodnier is an attorney with Jackson Lewis in Los Angeles. © 2024 Jackson Lewis. All rights reserved. Reposted with permission.