PAGA (California Private Attorneys General Act)

A California statute authorizing employees to sue employers on behalf of the state for Labor Code violations and collect civil penalties, with 75% of the recovery remitted to the California Labor and Workforce Development Agency and 25% retained by the aggrieved employees. PAGA claims are particularly valuable to litigation funders because they are not subject to class action waivers under California law following Viking River Cruises v. Moriana, preserving representative standing even when an arbitration agreement exists. The per-violation penalty structure — often $100 per employee per pay period for initial violations — can generate enormous aggregate exposure against large employers with systemic pay practices.

Because Viking River Cruises preserved PAGA representative standing even where a valid arbitration agreement exists, funders treat PAGA as one of the few employment vehicles in California that survives an otherwise disqualifying arbitration clause, materially expanding the set of arbitration-bound workforces that remain fundable. The per-employee, per-pay-period penalty structure can generate exposure large enough to justify funding even against employers whose individual wage violations would not otherwise support third-party capital on their own.