On September 27, 2021, Gov. Newsom signed into law SB 646, which exempts janitorial employees from PAGA if they are covered by a collective bargaining agreement meeting certain minimum criteria. The bill, which codifies a new Labor Code Section 2699.8, defines a "janitorial employee" as "an employee whose primary duties are to clean and keep in an orderly condition commercial working areas and washrooms, or the premises of an office, multiunit residential facility, industrial facility, health care facility, amusement park, convention center, stadium, racetrack, arena, or retail establishment." Cal. Lab. Code § 2699.8(e)(1). 

Under the new statute, janitorial employees cannot bring a PAGA action if they are covered by a collective bargaining agreement that "provides for the wages, hours of work, and working conditions of employees, provides premium wage rates for all overtime hours worked," and meets certain other conditions. Id. § 2699.8(a)(1). One of those conditions is providing a grievance and binding arbitration procedure to redress Labor Code violations and allowing the labor organization to pursue a grievance on behalf of affected employees. Id.

The legislative history indicates that this last condition was the driving force behind the bill. While lauding the impact of PAGA on labor law enforcement in California, the legislative reports also acknowledged that PAGA lawsuits "remain a costly and time-intensive process," often "with little upside" for either employers or employees. Senate Floor Analysis at 7. SB 646 "offers an alternative path for employers and employees" by incentivizing collective bargaining and "allowing [employees] to turn to mandatory arbitration instead of the courtroom" to enforce the Labor Code. Id. Despite some concern that this carve out "could lead to the erosion of PAGA rights for union workers" (id.), the bill passed easily.

It remains to be seen whether other industries will receive similar carve outs, or even if SB 646 foreshadows more significant reforms. An overhaul of PAGA seems extremely unlikely in the short or medium term, but at a minimum, SB 646 indicates that the Legislature may be open to tinkering around the edges.

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