SHRM26 Debrief · Legal & Compliant HR · #2630

California Earthquakes: What You Need To Know for 2027

with Jonathan Siegel

▶ Watch on the SHRM portal ~68 min, distilled

PAGA reformwage and hour compliancepayroll audits

"In California, you get paid for every second you work. Every second you work, you get paid."

What it was about

California employment law changes constantly and aggressively. HR must build a documented, good-faith compliance program covering audits, policies, training, and corrective action, both to reduce PAGA liability and to keep pace with the state's dense stack of new leave, wage, arbitration, and personnel-file mandates.

By the numbers

$100 per violation, per employee, per pay period

Typical PAGA penalty rate for employers

15% cap

Maximum PAGA penalty percentage an employer can argue for with a good-faith compliance program

$70,304

Current minimum annual salary test for executive, administrative, and professional overtime exemptions (2x state minimum wage x 2080 hours)

Key notes

Set up a good-faith compliance program with four documented buckets (payroll audits, lawful written policies, supervisor/employee training, corrective action) so counsel can argue for the 15% PAGA penalty cap if you're ever hit with a claim.
Keep separate PAGA files for policies, training, audits, and corrective action so you can produce complete documentation quickly when a PAGA letter arrives.
Update your handbook but hold distribution until after October 15th (ideally early November) since California's legislature typically finalizes new employment laws in that window for a January 1st effective date.

The contrarian takeEmployers who already have long-standing internal training or coaching practices may assume they're compliant, but the speaker argues the real gap isn't the practice itself — it's the failure to formally document and file it, which is what actually earns PAGA penalty protection.

Take this back Monday

Do this for your team

Pull last year's payroll codes with your longest-tenured payroll staffer to catch undocumented pay practices before they become PAGA claims.

Say this in your next leadership meeting

PAGA penalties drop to a 15% cap if we can prove a documented, good-faith compliance program — so we're building that paper trail now, not after a claim lands.

Watch out for

Waiting too long to start a good-faith compliance program because you're trying to perfect it first — you should start and refine rather than delay for months.
Reusing last year's Cal-WARN layoff notice without updating it for new required language about Workforce Development Board coordination and CalFresh.
Distributing your handbook update before the legislative session closes, then having to redo it when new laws pass in late September/October.

Fun fact · Jonathan Siegel

Jonathan Siegel is marking his 30th year at Jackson Lewis, having practiced workplace law exclusively that entire time.

If this landed, see these

↳ Go deeperCalifornia HR Minefields: What’s New, What’s Next, What’s CostlyExtends the good-faith compliance program into the fuller list of 2026 California minefields.⇄ The counterpointThe Supreme Court’s 2025–2026 Term: What HR Needs to Know NowWidens the risk lens past state PAGA exposure to shifting federal SCOTUS standards.✦ The unexpected oneTalent Intelligence on a Shoestring: Turning HR Data into Board InsightsSame paper trail, different audience: turn compliance documentation into a board-ready story.