This week Anne McWilliams and I presented our masterclass on the mid-year PAGA and class action update for California employers, and I want to share some of the data we covered because it surprised even me. When the Legislature reformed PAGA in June 2024, many of us expected the volume and value of these cases to come down. The data we are tracking through Scaled Comp — which now includes over 6,000 settlements pulled from public filings and court records — shows that has not happened yet. If anything, 2026 is shaping up to be the biggest year on record. Here are five takeaways from the first half of 2026 that every California employer should understand:
1. PAGA and class action settlements totaled $1.3 billion in the first six months of 2026.
That is not a typo. Across the roughly 1,400 to 1,500 settlements we tracked in the first half of the year, employers paid out approximately $1.3 billion — averaging about $219 million per month, and that figure is likely to grow because June’s numbers are still filling in as the LWDA continues posting settlement documents. I knew the number would be large, but when I first pulled it I double-checked it because I did not expect it to be that large. And the filings are not slowing down: PAGA notices filed with the LWDA are averaging about 849 per month, which puts 2026 on pace to exceed 10,000 notices and potentially become the biggest year yet for PAGA filings — two years after the reform that was supposed to slow this litigation down. For most companies operating in California, this is likely the single biggest source of exposure on the employment law front.
2. Smaller employers are now squarely in the crosshairs.
This was one of the most eye-opening findings in the data: 44% of the settlements in 2026 cover fewer than 200 employees, with the largest concentration of cases involving employers with 50 to 200 employees. The conventional wisdom that plaintiffs’ firms only chase large companies is out of date. The larger employers have increasingly dialed in their compliance — using software to track time records and limit violations — so plaintiffs’ firms have been moving down-market to smaller employers who often have fewer compliance systems in place. And geography is no protection either: while these cases have historically been centered in Los Angeles, San Francisco, and San Diego, we are seeing them expand well beyond the major metropolitan areas, aided by remote court appearances that make it easy to litigate in any jurisdiction. If you have 100 employees — or fewer — in California, do not assume you are not a target.
3. Most settlements are not the blockbusters that make headlines.
The million-dollar and five-million-dollar settlements get the press, but they are not representative. About half of the settlements in the first half of 2026 came in under $500,000, and the most common range is $100,000 to $500,000. Simple math on the totals (roughly $1.3 billion across roughly 1,400 to 1,500 settlements) produces an average near $900,000, but that average is skewed upward by a handful of very large cases — the typical case settles for far less. When we analyze these cases for clients, the total settlement amount actually tells you very little. The metrics that matter are the dollars per workweek for class claims and dollars per pay period for PAGA claims — that is how you compare apples to apples, and it is how your defense counsel should be benchmarking any settlement discussion. This data exists, and your attorney should be using it rather than relying on gut feel about what these cases “usually” settle for.
4. It takes about two years from PAGA notice to settlement.
On average, roughly two years pass between the filing of the PAGA notice with the LWDA and the filing of the settlement documents — and that figure has held remarkably consistent. This has two important implications. First, it means the effects of the June 2024 reform are only now beginning to show up in the settlement data, because the post-reform cases are just starting to reach resolution. Second, and more practically: time is money in these cases. Every additional month of litigation adds pay periods and workweeks to the potential exposure. If there is any realistic chance a case will settle, employers should push for early mediation — and start that process early, because mediator availability can run many months out. Cutting off the accrual of pay periods early should translate directly into a lower settlement. If early settlement is not realistic, then commit to litigating and building your defenses — but make that strategic decision deliberately, not by default.
5. Five plaintiffs’ firms account for roughly 40% of all settlements.
The PAGA landscape is remarkably concentrated. The five most active plaintiffs’ firms are responsible for about 40% of the settlements in 2026 — and slightly over 40% of the settlement dollars. These are highly specialized, volume-driven practices focused almost exclusively on wage and hour claims, and the concentration has only increased since the 2024 reform. This matters for employers in two ways. First, knowing the track record of the firm on the other side — what they settle for, what arguments they make, and how they run their cases — is valuable intelligence that should shape your defense strategy before you ever walk into a mediation. Second, these firms typically send cookie-cutter PAGA notices that list nearly every Labor Code provision without specifying what the employer actually did wrong — an issue the proposed LWDA regulations working their way through the process this year may finally address.
The bottom line: the 2024 reform did not end PAGA litigation, but it did fundamentally change how employers can defend these cases. The penalty caps — 15% if you took all reasonable steps before receiving a PAGA notice, 30% if you take them within 60 days after — are powerful tools, but the burden is on the employer to prove those steps with documentation. Regular payroll and time-record audits, compliant written policies, supervisor training, and corrective action are the four pillars, and they need to be documented, recurring practices — not a one-time event. With $1.3 billion on the table in just six months, taking those steps now is the best investment a California employer can make.
The slides from the masterclass are available upon request, and we publish a monthly report on PAGA and class action settlement trends through Scaled Comp for those who want to follow the data.
The post Five Numbers That Tell the Story of California PAGA and Class Actions at the Mid-Year Mark of 2026 appeared first on California Employment Law Report.
