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PAGA Risk Assessment Template

California Private Attorneys General Act Compliance Review

Important Legal Disclaimer

HR Bridge Partners is an HR consulting firm, NOT a law firm. We do not provide legal advice.

This PAGA Risk Assessment identifies potential compliance gaps and estimates exposure based on California Labor Code requirements. It is for informational and educational purposes only. For legal advice regarding specific situations, consult with a qualified California employment attorney.

This assessment does not guarantee elimination of PAGA risk or prevent future claims. It provides guidance to help reduce exposure through improved compliance practices.

Client Information

1. Meal Break Compliance HIGH RISK AREA

Requirement: 30-minute unpaid meal break before end of 5th hour of work (Labor Code §512)

PAGA Penalty: $100 per employee, per pay period with violation ($200 for subsequent violations)

Policy clearly states 30-minute meal break before end of 5th hour
Timekeeping system records meal periods, not just auto-deducted
Written waiver signed by employee and kept on file
1 hour of pay at regular rate when meal break not provided
All supervisors understand legal requirements and company policy
System doesn't deduct meal periods unless employee confirms break taken
Company culture allows and encourages taking full meal periods

Estimated PAGA Exposure (Meal Breaks)

Number of employees: employees
Estimated violations per week: violations/week
Weeks per year: 52 weeks
PAGA penalty per violation: $100
TOTAL ESTIMATED EXPOSURE: $520,000

Recommended Actions

IMMEDIATE (Week 1-2):

SHORT-TERM (Month 1-3):

2. Rest Break Compliance HIGH RISK AREA

Requirement: 10-minute paid rest break per 4 hours worked (or major fraction thereof)

PAGA Penalty: $100 per employee, per pay period with violation

Policy states 10-minute paid rest break for every 4 hours or major fraction
Employees understand rest breaks are on the clock
Separate 10-minute breaks, not added to 30-minute meal period
1 hour of pay at regular rate when rest break not provided
Rest breaks should be in middle of each 4-hour period when practicable

Estimated PAGA Exposure (Rest Breaks)

Number of employees: employees
Estimated violations per week: violations/week
Weeks per year: 52 weeks
PAGA penalty per violation: $100
TOTAL ESTIMATED EXPOSURE: $260,000

3. Wage Statement Compliance MEDIUM RISK AREA

Requirement: Itemized wage statements with 9 required pieces of information (Labor Code §226)

PAGA Penalty: $100 per employee, per pay period with non-compliant wage statement

At least one identifier present on every pay stub
Complete legal name and physical address of employer
Broken out by category, not just one lump sum
Rate of pay clearly stated for each category
Total wages before deductions
Each deduction listed separately with amounts
Total wages after all deductions
Clear start and end dates for the pay period
For payroll/personnel record purposes

Estimated PAGA Exposure (Wage Statements)

Number of employees: employees
Pay periods per year: 24 (bi-weekly) or 26 (semi-monthly)
PAGA penalty per violation: $100
POTENTIAL EXPOSURE (if missing fields): $120,000 - $130,000

4. Final Paycheck Timing MEDIUM RISK AREA

Requirement: Immediate payment if employer terminates; within 72 hours if employee quits (Labor Code §201-203)

Penalty: Waiting time penalties up to 30 days of wages + PAGA penalties

Written procedure for final paycheck timing
Can cut check on-site or have available when terminating
System to process final pay within 72 hours when employee quits
Final paycheck ready on employee's last day if proper notice given
Vacation is treated as earned wages and must be paid at termination
Cannot withhold final wages for any reason

Estimated Exposure (Final Paychecks)

Example: 10 terminations/year with delayed paychecks

PAGA penalty per violation: $100
PLUS: Waiting time penalties Up to 30 days wages per employee
POTENTIAL EXPOSURE: $1,000 + penalties

5. Overtime & Wage Payment MEDIUM RISK AREA

Requirement: Daily overtime after 8 hours; double time after 12 hours; 7th day rules (Labor Code §510)

PAGA Penalty: $100 per violation plus back wages owed

Overtime rate (1.5x) paid for hours 9-12 in a workday
Double time (2x) paid for all hours over 12 in a workday
OT for first 8 hours, double time after 8 on 7th day
No off-the-clock work, pre-shift meetings, post-shift duties unpaid
If rounding used, must be neutral (not always in employer's favor)
Private employers cannot offer comp time in lieu of OT pay

6. Independent Contractor Classification (AB 5) HIGH RISK AREA

Requirement: ABC test must be met for all three prongs (AB 5)

Penalties: $5,000-$25,000 per misclassified worker + back wages + PAGA exposure

Worker sets own hours, methods, location without company control
Worker's services are not part of your core business operations
Worker has LLC, multiple clients, business cards, advertises services
Contracts clearly state IC relationship and pass ABC test
Independent contractors bill company, not on W-2 payroll

Estimated AB 5 Misclassification Exposure

Example: 10 misclassified workers for 2 years

Penalties per worker: $5,000 - $25,000
Back wages, benefits, taxes: Variable
PAGA exposure: Additional violations
TOTAL ESTIMATED EXPOSURE: $500,000 - $1,000,000+

7. Exempt Employee Classification MEDIUM RISK AREA

Requirement: Must meet salary basis test, salary level test, and duties test

Risk: Misclassified exempt employees are owed overtime + PAGA exposure

Paid predetermined salary, not subject to reduction based on hours
2026: $68,640/year minimum for most exemptions (based on $16.50 CA min wage)
Manages 2+ employees, has hire/fire authority, primarily managerial duties
Office/non-manual work, exercises discretion, directly assists management
Requires advanced knowledge, prolonged specialized education, discretion
What employee ACTUALLY does matches exemption requirements

8. Minimum Wage & Pay Frequency LOW RISK AREA

Requirement: California minimum wage $16.50/hour (2026); pay at least twice per month

$16.50/hour minimum as of 2026 (some cities higher)
Employees paid at least twice per month (semi-monthly or bi-weekly)
Employees know when to expect payment

9. Record Keeping Requirements LOW RISK AREA

Requirement: Maintain payroll records for 3 years; personnel records for 3 years

Time cards, wage computations, pay stubs retained
Applications, evaluations, disciplinary records kept 3+ years
Required notice given within 7 days of hire, signed copy retained

10. Required Postings & Notices LOW RISK AREA

Requirement: Display required California labor law posters and notices

2026 posters in break room or common area, in English and Spanish if needed
Notice states regular paydays, time and place of payment
Notice of workers' comp coverage visible to all employees
Workplace safety information posted

Overall Risk Assessment Summary

Risk Area Compliant? Risk Level Est. Exposure
1. Meal Break Compliance HIGH $520,000
2. Rest Break Compliance HIGH $260,000
3. Wage Statement Compliance MEDIUM $120,000
4. Final Paycheck Timing MEDIUM Variable
5. Overtime Calculation MEDIUM Variable
6. AB 5 Classification HIGH $500K-$1M+
TOTAL ESTIMATED PAGA EXPOSURE: $1.4M - $2.4M+

Prioritized Action Plan

IMMEDIATE PRIORITY (Week 1-2)

SHORT-TERM (Month 1-3)

ONGOING (3-12 Months)

Implementation Cost Estimate

Fix/Improvement Timeline Est. Cost
Implement meal/rest break tracking system 2-4 weeks $1,000-2,000
Update wage statement format (payroll system) 1-2 weeks $500-1,500
Manager training (2-hour session) 1 week $500-1,000
Update employee handbook (California-compliant) 2-4 weeks $2,500-4,000
AB 5 classification review & contracts 2-3 weeks $2,000-4,000
TOTAL IMPLEMENTATION COST: $6,500 - $12,500

ROI Analysis: Implementation cost of $6,500-$12,500 vs. Potential PAGA exposure of $1.4M-$2.4M+

Risk Reduction: Over 99% cost-effective

Consultant Recommendations

Recommended Next Steps

Present report to management/HR team
Address highest-risk areas first
Consider project work or retainer package for implementation support
Verify implementation of immediate priority items
Ongoing monitoring recommended

Assessment Completion

Consultant Signature

Date

⚖️ Disclaimer & Limitations

This assessment is provided for informational purposes only and does not constitute legal advice.

HR Bridge Partners is an HR consulting firm, NOT a law firm. This PAGA Risk Assessment:

For legal advice regarding specific PAGA matters, consult with a qualified California employment attorney.

Implementation of recommendations is the responsibility of the client. Results depend on proper implementation and ongoing adherence to California employment law requirements.