A PAGA case doesn’t end when the employer and the plaintiff shake hands. Under Labor Code section 2699, subdivision (s)(2), “The superior court shall review and approve any settlement of any civil action filed pursuant to this part,” and the proposed settlement must be sent to the Labor and Workforce Development Agency at the same time. A judge can reject a deal both sides want. Employers that plan for that review get their releases. Employers that don’t can end up renegotiating after the money is already agreed.
Does a PAGA settlement need court approval?
Yes, every one, whatever its size.
The approval requirement is in the statute, not just local practice. Section 2699, subdivision (s)(2) also provides that “The proposed settlement shall be submitted to the agency at the same time that it is submitted to the court.” After the court rules, subdivision (s)(3) requires that a copy of the judgment, and any order that awards or denies civil penalties, “shall be submitted to the agency within 10 days after entry of the judgment or order.” Those filings go through the LWDA’s online system under subdivision (s)(4).
The reason is that a PAGA plaintiff sues as the state’s proxy. A private settlement of an individual wage claim binds only the employee who signs it. A PAGA settlement releases penalty claims the state owns, so the statute puts a judge between the parties and the release.
What standard does the court apply?
The leading Court of Appeal decision borrows from class action practice and adds PAGA’s purposes.
In Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, the court held “that a trial court should evaluate a PAGA settlement to determine whether it is fair, reasonable, and adequate in view of PAGA’s purposes to remediate present labor law violations, deter future ones, and to maximize enforcement of state labor laws.” (The Supreme Court later disapproved Moniz on a different question, the standing of plaintiffs in overlapping cases, discussed below.)
The Moniz settlement is a useful example of what persuades a judge. The trial court approved a $4.5 million deal and, according to the opinion, pointed out that it “includes a change of policy by Adecco in the language of its employment agreements to directly address the concerns raised by this lawsuit.” A practice change gives the court something concrete to cite when it finds the deal serves PAGA’s enforcement goals. A settlement that pays money and changes nothing is harder to defend.
Judges also want to see the math. A motion that explains the maximum theoretical penalty, the realistic range after defenses and penalty reductions, and why the settlement amount falls where it does gives the court a reason to approve. A motion that offers only a total and a conclusion gives the court a reason to ask for more briefing, and every continuance pushes back the date the employer gets its release.
What role does the LWDA play?
The agency gets the settlement and may comment on it. It doesn’t have to approve it.
The Supreme Court of California addressed the agency’s role in Turrieta v. Lyft, Inc. (2024) 16 Cal.5th 664. Reading the submission requirement, the Court concluded that it “necessarily implies, at minimum, that the LWDA may offer comments to courts on proposed settlements and that courts have discretion to consider such comments.”
Agency comments matter in practice. In Moniz, the LWDA asked the trial court to apply a stricter standard, and the court analyzed the deal under both. A settlement that already answers the agency’s usual concerns about penalty value, release scope, and fees makes those comments less damaging.
Can a plaintiff in another PAGA case block the settlement?
Not by intervening, after Turrieta. A plaintiff in an overlapping case can still object informally.
Large employers often face several PAGA cases over the same practices, filed by different employees and different firms. In Turrieta, one of those plaintiffs settled with Lyft, and plaintiffs in the overlapping cases tried to intervene and then to vacate the judgment. Justice Jenkins wrote for the majority. The Court held that the power to intervene in another plaintiff’s action, to force the court to consider objections, and to move to vacate the judgment “would be inconsistent with the scheme the Legislature enacted.” Justice Liu dissented.
That holding helps settling employers. It doesn’t leave objectors without a voice. The Court noted that trial courts keep “discretion to consider arguments and evidence informally offered by plaintiffs pursuing overlapping PAGA claims in separate actions,” and that those plaintiffs “may also inform the LWDA of their concerns about proposed settlements.” Expect the competing firm to file something. The settling parties should be ready to answer it on the merits.
| Requirement | Source | What the employer should have ready |
|---|---|---|
| Court review and approval | Lab. Code § 2699(s)(2) | A motion explaining the penalty value, the release, and the risk of further litigation |
| Submission to the LWDA | Lab. Code § 2699(s)(2), (s)(4) | Confirmation that plaintiff’s counsel submitted the proposed settlement when filing the motion |
| Approval standard | Moniz (2021) 72 Cal.App.5th 56 | Evidence that the deal serves PAGA’s enforcement goals, such as a practice change |
| Objections from overlapping cases | Turrieta (2024) 16 Cal.5th 664 | A response to informal objections and any LWDA comments |
| Judgment to the LWDA | Lab. Code § 2699(s)(3) | Confirmation that the judgment or penalty order was sent within 10 days of entry |
How are PAGA settlement dollars divided?
The penalties are split between the state and the employees, and the statute sets the split.
Under section 2699, subdivision (m), civil penalties recovered by aggrieved employees go “65 percent to the Labor and Workforce Development Agency” and “35 percent to the aggrieved employees,” with an exception in subdivision (n). Attorney’s fees and administration costs usually come out first, which is why courts look hard at the fee request in the same motion. A settlement that labels most of the money as wages or individual claims, and very little as PAGA penalties, will draw questions from the judge and the agency about whether the state’s share is being shortchanged.
The release needs the same care. A release that reaches beyond the violations described in the PAGA notice invites an objection and may not survive approval. The firm’s guide to responding to a PAGA notice covers how that notice frames the claims from the start.
Steps to take before signing a PAGA settlement
- Keep the litigation hold in place on payroll and timekeeping data and on every version of the challenged policies until the judgment is final.
- Calendar the approval hearing and the agency submission dates, and confirm that any EPLI carrier has consented to the settlement terms where the policy requires it.
- Identify every other pending PAGA notice or lawsuit covering the same practices, and make sure no current employee who is part of the case faces any action that could look like retaliation.
- Pull the documents the approval motion will rely on: the exposure analysis, evidence of any practice change, and the release language tied to the violations in the notice.
- Talk to a lawyer before agreeing to a release, a penalty allocation, or a fee amount, since each one will be reviewed by the court and may be challenged by the agency.
A PAGA settlement is really two negotiations, one with the plaintiff and one with the judge who has to sign off. Counsel experienced in defending employment lawsuits in California drafts the deal with the approval motion in mind, because the court reads the release and the allocation before it reads anything else.
FAQ
Can an employer settle a PAGA claim privately with just the named plaintiff?
The named plaintiff can release their own individual claims privately. The PAGA penalty claim belongs to the state, so releasing it requires court approval under Labor Code section 2699(s)(2), with the proposed settlement submitted to the LWDA. A private deal that claims to settle the PAGA claim without that approval leaves the employer exposed.
Does the LWDA have to approve a PAGA settlement?
No. The statute requires submission to the agency, not its consent. In Turrieta v. Lyft, the Supreme Court said the submission requirement implies the LWDA may comment on proposed settlements and that courts have discretion to consider those comments. The judge makes the approval decision.
What happens if the court rejects the settlement?
The case goes back to litigation unless the parties revise the deal. Courts often explain what concerned them, such as the penalty allocation, the release, or the fee request, and the parties can return with an amended agreement. Building the approval record before the first hearing reduces the chance of a second round.
If your company is negotiating a PAGA settlement
If your company is close to settling a PAGA lawsuit, or faces overlapping PAGA cases over the same practices, the approval record usually decides whether the release holds up. Rosenberger + Kawabata represents employers defending employment lawsuits and claims through its business litigation practice, including claims involving PAGA civil penalties and overlapping representative actions. Contact Rosenberger + Kawabata online for a confidential consultation, or call (310) 894-6921.
Sources
The statute is Labor Code section 2699, subdivisions (m), (n), and (s). The decisions are Turrieta v. Lyft, Inc. (2024) 16 Cal.5th 664 and Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, disapproved on another ground in Turrieta.
This post is general information about California and federal employment law as of November 7, 2026. It is not legal advice, and reading it does not create an attorney-client relationship. Employment statutes, regulations, and court decisions change often, and the outcome of any claim depends on its facts. Past results do not guarantee future outcomes.