As Private Attorney General Act (PAGA) settlements proliferate, Rust Consulting offers California attorneys this summary
April 2017
Navigating PAGA Settlements What We’ve Noticed
April 2017
by Jonathan Paul
As Private Attorney General Act (PAGA) settlements proliferate, Rust Consulting offers California attorneys this summary of PAGA settlement administration based on our experience handling more than 30 PAGA settlements. COSTS Based on characteristics described below, administrators should be able to minimize, and even cap, fees related to PAGA settlement administration, offering clients cost certainty. TIMING Without complicating factors like calculations and tax reporting that are typical to class actions and add time to ramp-up and ramp-down, Rust has found that features of PAGA settlements speed the administrative process. ►► Class members generally receive the same amounts. Without the need for complex payment calculations, administrative processes can be streamlined to move payment along more quickly. ►► Payments are typically not reportable. In our PAGA settlement experience, individual payments have fallen below the $600 tax reporting threshold requiring an IRS Form 1099, allowing us to eliminate unnecessary steps. DISTRIBUTION PROCESS Process standardization saves costs and time.
PAGA at a Glance ►► Class members generally receive the same amounts. ►► Payments typically not reportable. ►► Document design minimizes costs. ►► Shared customer support maximizes efficiency. ►► Cases can wrap up quickly.
►► Document design minimizes print and mail costs. Combining the payment instrument and court-approved cover letter language allows you to meet all PAGA settlement requirements with one printed sheet, in one envelope, in one single mailing. ►► Shared customer support maximizes efficiency. A single in-house customer service team, well-versed in PAGA settlement questions, is “shared” with other distribution projects, maximizing efficiency and keeping costs low while providing an option for live support. ►► Cases can wrap up quickly after distribution. With short check-cashing periods (usually 90 days) and stale dates (typically 120 days or less) and no reminder outreach, Rust often fulfills PAGA distributions with a simple, standardized process without a long holding period.
ABOUT THE AUTHOR Jonathan Paul is a senior vice president at Rust Consulting. Since joining Rust in 2006, he has been responsible for administration of over 400 labor and employment settlements. D: 949.336.8207 E:
[email protected]
ABOUT WHAT WE’VE NOTICED What We’ve Noticed is a periodic publication from Rust Consulting and Kinsella Media highlighting current trends and best practices.
