As we move toward 2026, California employers—especially in hospitality—are navigating one of the most complex wage-and-hour landscapes in the country. The 2024 PAGA reform brought meaningful relief, but only for employers who take their compliance obligations seriously and can prove it.
At the same time, technology and AI are beginning to transform what compliance looks like. Our firm has been developing an AI-powered compliance platform designed specifically for California wage-and-hour rules, and early feedback from the first companies using it has been extremely positive. More on that below.
For now, here are the five compliance priorities every employer should be focused on as we head into the new year:
1. PAGA Reform Only Helps Employers Who Can Prove Compliance
The 2024 PAGA reform allows employers to dramatically reduce potential penalties—down to 15% of what plaintiffs could otherwise seek. But this benefit is not automatic.
To qualify, employers must show they took meaningful “reasonable steps,” including:
Documentation is now everything.
If it’s not documented, it didn’t happen.
2. PAGA Filings Are Still at Record Levels
Many assumed PAGA lawsuits would drop after the reform. They didn’t.
In fact:
Toronto, Ontario--(Newsfile Corp. - January 23, 2026) - STRACON Group Holding Inc. (TSX: STG) (BVL: STG) ("STRACON" or the "Company") rejects false claims made by SLC Holdings Inc. ("SLC") in an ap...