Are You PAGA Reform Compliant? (And Why UKG, Paylocity, and Workday Users Can’t Ignore It)
Wage and hour compliance has always been a critical—yet often overlooked—pillar of business operations. However, with California’s reform of the Private Attorneys General Act (PAGA), the landscape has shifted. Businesses now face new expectations, higher scrutiny, and fresh opportunities for risk exposure. Are you PAGA Reform compliant, or are hidden gaps in your systems putting your organization at risk?
If you’re in HR, finance, legal, or operations—and rely on systems like UKG, Paylocity, or Workday—this blog provides a roadmap to protect your organization. You’ll learn what changed, why it matters, and how to use your HCM tools more strategically.
What You’ll Learn in This Guide:
- What changed with PAGA reform
- The cost of wage and hour noncompliance
- How to leverage your HCM system to mitigate risk
- A five-step action plan for compliance
- How PredictiveHR can help you stay ahead
Let’s get into it.
What Is PAGA—and Why Should You Care?
The Private Attorneys General Act (PAGA) allows employees in California to file lawsuits for labor code violations without involving the Labor Commissioner. This law effectively empowers workers to enforce compliance themselves—and the consequences can escalate quickly.
Before 2024, these lawsuits were widespread and often exploited by attorneys targeting large settlements. Businesses found themselves paying millions, often due to outdated systems or misunderstood rules. Many HR and legal teams couldn’t keep up. Are you PAGA Reform Compliant, or could your internal gaps leave you vulnerable to these kinds of claims?
To combat this, California enacted PAGA reform. While the changes offer some relief, they don’t eliminate risk. Instead, they shift the burden of proof and emphasize internal accountability.
What Changed Under the 2024 PAGA Reform
The reform introduced both leniencies and higher standards. Although penalties for minor violations have been capped and employers now have a short cure period, the law also demands that businesses document proactive compliance.
Here’s what’s new:
- Stricter filing requirements mean vague or broad claims no longer hold
- Reduced penalties apply only if violations are minor or first-time
- Cure opportunities exist but only for those who act fast
- Documentation requirements now demand proof of good-faith efforts
Clearly, knowing your risk areas in advance is key. That’s where audits come in.
Why Wage and Hour Audits Matter More Than Ever
A Wage and Hour Audit identifies system flaws before they trigger a lawsuit. It also creates a compliance baseline and builds your legal defense proactively.
Through audits, you can uncover misclassifications, inaccurate time tracking, improper pay stub formatting, break violations, and policy mismatches. More importantly, audits allow your team to fix those issues before they snowball into claims.
Failing to audit means letting problems grow silently in the background. Every pay cycle becomes a risk multiplier.
The True Cost of Inaction
Imagine your organization has 200 employees in California. If your systems don’t track breaks properly or continue to round timecards inconsistently, you might unknowingly generate 10,000+ incorrect pay stubs in under two years.
Even with reformed penalties, your financial exposure can exceed $500,000. This figure includes back pay, legal fees, and internal disruption.
Beyond money, you risk reputational damage, employee churn, and executive fallout. Doing nothing will cost you more than any audit ever could.
Already Using UKG, Paylocity, or Workday? Don’t Miss This
The best part? You likely already have the tools to stay compliant. Platforms like UKG, Paylocity, and Workday offer powerful compliance capabilities—but most companies underuse them.
Here’s how to get more from each one.
UKG: Built for Complex Labor Management
UKG (Ultimate Kronos Group) offers strong tools for time tracking and scheduling, but configuration makes all the difference. Instead of relying on default settings, configure:
- Attestation features for break tracking
- Custom pay rules for shift penalties
- Alerts for overtime risks
- Historical audit logs for accountability
Pro Tip: Use the Data Integrity Engine to run pre-audit simulations and expose blind spots.
Paylocity: Automate to Eliminate Risk
Paylocity’s automation suite helps mid-market businesses monitor compliance in real time. You should be using:
- Punch exception reporting
- Break violation alerts
- Compliance dashboards
- Digital HR forms to document corrections
Pro Tip: Set monthly compliance snapshot reports for each location to detect patterns early.
Workday: Enterprise Power, If Configured Correctly
Workday offers detailed labor compliance tools—but they must be activated. You can:
- Create validation rules for break and OT violations
- Set up audit trails for edits and overrides
- Integrate time tracking with payroll to reduce manual risks
- Build workflows that ensure issues are corrected and recorded
Pro Tip: Work with a Workday optimization partner to enable real-time compliance alerts.
Your 5-Step Action Plan for PAGA Compliance
Take control of your compliance posture with this simple five-step framework:
-
Audit Your Wage and Hour Data
Hire experts or use platform-native tools to review your timecard data, pay rules, and exception logs. -
Sync Policies with Platform Rules
Check that your employee handbook matches your actual HCM system settings—especially for breaks, overtime, and job classifications. -
Enable Alerts for Risk Triggers
Configure your system to flag missed breaks, excessive hours, and rounding issues before they create exposure. -
Digitize and Document Cure Actions
Use digital forms and workflows to log fixes, document manager follow-up, and create a trail of corrective action. -
Review Historical Trends
Go back at least 12 months. Address existing violations now to reduce the risk of future claims.
This Isn’t Just About HR—It’s Business Survival
Let’s be real: this isn’t just HR’s problem. Wage and hour violations affect your bottom line, brand, boardroom discussions, and executive trust. Every delay adds to your liability and erodes internal confidence.
Taking action shows leadership. It also saves time, money, and reputation.
How PredictiveHR Helps You Stay Compliant
Our team at PredictiveHR specializes in aligning your policies, systems, and documentation. We work directly within UKG, Paylocity, and Workday to configure tools you already have—so you get maximum protection without starting from scratch. Are you PAGA Reform Compliant? If not, we’ll help you get there—quickly, efficiently, and with minimal disruption.
We help you:
- Identify compliance gaps
- Optimize platform configurations
- Automate alerts, workflows, and reports
- Build a defensible audit trail
Ready to Make Compliance Easy?
- Schedule a free 30-minute Wage & Hour Risk Assessment
- Get a custom audit report based on your HCM system
- Learn how PredictiveHR clients stay protected and ahead
Or email us at [email protected] to get started!
Because waiting for a lawsuit isn’t a strategy—it’s a gamble.