Two narrow doors out of PAGA.
PAGA can be bargained away, but only in two industries and only on exact terms: a real wage premium, a grievance-and-arbitration route for the same violations, and an express waiver. Here are both carve-outs, their conditions, and the dates they expire.
Amended by Stats. 2024, Ch. 803, Sec. 1. (AB 1034) Effective January 1, 2025. Repealed as of January 1, 2038, by its own provisions. Added by Stats. 2021, Ch. 337, Sec. 1. (SB 646) Effective January 1, 2022. Repealed as of July 1, 2028, by its own provisions.§ 2699.6 was amended by AB 1034 (eff. Jan. 1, 2025); § 2699.8 was added by SB 646 (eff. Jan. 1, 2022). Neither carries the later AB 1170 (eff. Jan. 1, 2026) code-maintenance stamp that §§ 2699 and 2699.3 carry. Reflects California law as of July 13, 2026.
Both exemptions turn on the precise terms of a collective bargaining agreement and apply only to the industries and unionized workforces the statute names. Case law is thin: one published decision — Oswald v. Murray Plumbing & Heating Corp. (2022) 82 Cal.App.5th 938 — upheld a construction CBA's express PAGA waiver under § 2699.6 as a matter of law, while the § 2699.8 janitorial conditions remain judicially unconstrued. This explainer describes the statutory conditions and sunsets; it is educational, not legal advice.
A union contract can take PAGA's place — in two industries.#
PAGAThe Labor Code Private Attorneys General Act of 2004 — the law that lets an employee, standing in for the State as a 'private attorney general,' sue to enforce the Labor Code.Lab. Code § 2698 normally reaches any covered Labor Code violation through a Representative actionA suit one employee brings on the State's behalf to recover penalties for an entire workforce — which, unlike a class action, needs no class certification.Lab. Code § 2699(a). The Legislature carved out two industries from that reach, on a shared premise: where a collective bargaining agreement already does the State’s enforcement work — paying above the floor and policing the same violations through arbitration — a separate PAGA action is unnecessary. The carve-outs are construction (§ 2699.6) and janitorial (§ 2699.8).
Both turn on the same three conditions before anything else applies:
- A regular/total pay floor of at least 30% above the state minimum wage
- A grievance-and-binding-arbitration route covering the same Labor Code violations PAGA would reach
- An express waiver of PAGA in clear and unambiguous terms
Two cautions frame everything below. These are narrow — they reach only the named industries, only unionized workforces, and only where the contract clears every condition. And they are temporary — each section repeals itself by its own terms on a fixed date.
The construction exemption, condition by condition.#
PAGA does not reach a construction-industry employee whose work is performed under a qualifying collective bargaining agreement. The premise is that the CBA already does PAGA's enforcement work — it sets pay well above the floor, pays an overtime premium, bars the same Labor Code violations PAGA would reach, and routes them to grievance-and-binding-arbitration instead of a representative court action. The carve-out is conditioned and temporary; it repeals on January 1, 2038.
This part shall not apply to an employee in the construction industry with respect to work performed under a valid collective bargaining agreement that expressly provides for the wages, hours of work, and working conditions of employees, premium wage rates for all overtime hours worked, and for the employee to receive a regular hourly pay rate of not less than 30 percent more than the state minimum wage rate, and the agreement does all of the following: …
PAGA does not reach a construction-industry employee whose work is performed under a CBA that meets the threshold requirements — the agreement must expressly set wages, hours, and working conditions, pay a premium for all overtime, put the regular hourly pay rate at least 30 percent above the state minimum wage, and then satisfy each condition that follows.
Each of these conditions must be met:
Prohibits all of the violations of this code that would be redressable pursuant to this part and provides for a grievance and binding arbitration procedure to redress those violations.
The agreement must itself prohibit every Labor Code violation that PAGA could otherwise redress, and supply a grievance-and-binding-arbitration route to remedy them. The point is substitution: the contractual machinery stands in for the PAGA action, so the violations are not left unenforced — they are enforced through arbitration instead.
Expressly waives the requirements of this part in clear and unambiguous terms.
The waiver of PAGA cannot be implied or buried. It must be express and stated in clear and unambiguous terms in the agreement. A general arbitration clause is not enough; the CBA has to name and waive PAGA itself.
One published decision has applied this condition: Oswald v. Murray Plumbing & Heating Corp. (2022) 82 Cal.App.5th 938 held that a CBA which expressly and unambiguously waived PAGA satisfied § 2699.6 as a matter of law — and that a memorandum of understanding adopting the exemption's terms could apply retroactively to a pending suit. What a closer, less explicit waiver must say — e.g. whether it must cite the Act by name or section — remains unresolved.
Authorizes the arbitrator to award any and all remedies otherwise available under this code, provided that nothing in this section authorizes the award of penalties under this part that would be payable to the Labor and Workforce Development Agency.
The arbitrator must be empowered to award every remedy the Labor Code otherwise provides, so the worker loses no substantive relief by going to arbitration. The one carve-out runs the other way: the arbitrator is not authorized to award the PAGA penalties that would have gone to the State (the LWDA's share). Those State-bound civil penalties are simply outside the bargained-for system.
This is the seam where the exemption and PAGA's public-enforcement purpose meet: the worker keeps make-whole remedies in arbitration, but the State's penalty recovery is neither preserved nor redirected — it is not available in the arbitral forum at all.
This section shall remain in effect only until January 1, 2038, and as of that date is repealed.
The construction exemption is not permanent. The section repeals itself on January 1, 2038. AB 1034 extended this sunset — the prior version of § 2699.6 carried an earlier repeal date; the current operative text runs the carve-out through the end of 2037.
One boundary on the waiver, easy to miss: it gives up the PAGA claim, and nothing more.
Except for a civil action under Section 2699, this section does not preclude an employee from pursuing any other civil action against an employer, including, but not limited to, an action for a violation of the California Fair Employment and Housing Act …, Title VII of the Civil Rights Act of 1964 …, or any other prohibition of discrimination or harassment.
The waiver reaches only a civil action under § 2699. Every other claim the worker might bring — under the Fair Employment and Housing Act, Title VII, or any other prohibition on discrimination or harassment — is expressly preserved.
The janitorial exemption is drawn far more tightly.#
A narrow carve-out for unionized janitorial employees. It is drawn far more tightly than the construction exemption: it reaches only a janitorial employee represented by a labor organization that already represented janitors before January 1, 2021, employed by a janitorial contractor that registered as a property service employer under § 1423 in 2020, under a CBA in effect before July 1, 2028. The same substitution logic applies — premium pay, an internal grievance-and-arbitration route for the same violations, and an express PAGA waiver — and the carve-out sunsets on July 1, 2028.
This part shall not apply to a janitorial employee represented by a labor organization that has represented janitors before January 1, 2021, and employed by a janitorial contractor who registered as a property service employer pursuant to Section 1423 in calendar year 2020, with respect to work performed under a valid collective bargaining agreement in effect any time before July 1, 2028, that expressly provides for the wages, hours of work, and working conditions of employees, provides premium wage rates for all overtime hours worked, and does all of the following: …
PAGA does not reach a janitorial employee within a tightly drawn group — represented by a union that already represented janitors before January 1, 2021, and employed by a contractor that registered as a property service employer under § 1423 in 2020 — whose work is under a qualifying CBA in effect before July 1, 2028 that sets wages, hours, and working conditions, pays an overtime premium, and meets each condition below.
The qualifying conditions, including two the construction section has no analogue for:
Prohibits all of the violations of this code that would be redressable pursuant to this part, provides for a grievance and binding arbitration procedure to redress those violations, and allows the labor organization to pursue a grievance on behalf of all affected employees.
As in construction, the agreement must prohibit the same Labor Code violations PAGA would reach and route them to grievance-and-binding-arbitration. The janitorial version adds a collective dimension the construction text does not state expressly: the labor organization must be allowed to pursue a grievance on behalf of all affected employees, so the arbitral route can do representative work the way a PAGA action would.
Expressly waives the requirements of this part in clear and unambiguous terms.
The PAGA waiver must be express and stated in clear and unambiguous terms — identical in wording to the construction condition. An implied waiver or a generic arbitration clause does not satisfy it.
Untested by case law for this section: no published California decision has construed § 2699.8's waiver standard. Its § 2699.6(a)(2) twin has one published application — Oswald v. Murray Plumbing & Heating Corp. (2022) 82 Cal.App.5th 938 upheld an express, unambiguous construction-CBA waiver as a matter of law — persuasive context here, though it construed the construction exemption, not this one.
Authorizes the arbitrator to award any and all remedies otherwise available under this code, provided that nothing in this section authorizes the award of penalties under this part that would be payable to the Labor and Workforce Development Agency.
Word-for-word the construction condition: the arbitrator must be able to award every Labor Code remedy, except the PAGA penalties that would be payable to the State. The worker keeps full make-whole relief in arbitration; the State's penalty share is not available there.
Any janitorial contractor who has entered into an agreement that meets the criteria in subdivision (a) above shall, within 60 days of entering the agreement, share with the Labor and Workforce Development Agency the following information: (1) The name of the janitorial contractor. (2) The name of the labor organization. (3) The number of employees covered by the agreement. (4) The duration of the agreement.
A reporting condition with no analogue in the construction exemption. Within 60 days of entering a qualifying agreement, the janitorial contractor must give the LWDA the contractor's name, the labor organization's name, the number of employees covered, and the agreement's duration — so the State can see which workforces have moved off PAGA and onto the arbitral track.
Nothing in this section shall prevent a janitorial employee from filing an action under Section 2699.3 if there is a finding by a court or administrative agency of competent jurisdiction that the labor organization has breached its duty of fair representation in relation to a claim under Section 2699.3.
The exemption is not absolute. If a court or competent agency finds that the union breached its duty of fair representation as to a § 2699.3 claim, the janitorial employee may file a PAGA action after all. The carve-out assumes the union will actually pursue the workers' violations through arbitration; where it fails that duty, the PAGA door reopens. The construction exemption has no equivalent safety valve.
This section shall remain in effect only until July 1, 2028, and as of that date is repealed.
The janitorial exemption repeals on July 1, 2028 (subdivision (h)). It has a second, earlier-triggering limit as well: subdivision (d) expires the exception for a given CBA on "the date the collective bargaining agreement expires or on July 1, 2028, whichever is earlier" — so a particular agreement can lose the carve-out before the section itself repeals, if that CBA ends first.
That repeals the whole section. A second, earlier-triggering limit operates on each individual agreement:
The exception provided by this section shall expire on the date the collective bargaining agreement expires or on July 1, 2028, whichever is earlier.
For any one qualifying CBA, the exemption ends at whichever comes first: the CBA's own expiration, or July 1, 2028. This is distinct from the section's blanket repeal in subdivision (h) — a given agreement can fall out of the carve-out before the statute sunsets.
As with construction, the waiver is bounded — it surrenders the PAGA claim alone:
Except for a civil action under Section 2699, nothing in this section precludes an employee from pursuing any other civil action against an employer, including, but not limited to, an action for a violation of the California Fair Employment and Housing Act …, Title VII of the Civil Rights Act of 1964 …, or any other prohibition of discrimination or harassment.
Here too, only a civil action under § 2699 is waived. The worker’s other claims — under the Fair Employment and Housing Act, Title VII, or any other prohibition on discrimination or harassment — survive untouched.
Two traps for the careless reader.#
The two carve-outs read as twins, and mostly are. But two differences decide cases, and a third question has no answer yet.
The 30% premium is measured on different bases. § 2699.6(a) measures the floor against the “regular hourly pay rate” — the cash rate. § 2699.8(a)(1) measures “total hourly compensation, inclusive of wages, health insurance, pension, training, vacation, holiday, and fringe benefit funds.” The janitorial base counts benefits toward the 30%; the construction base does not. Reading one section’s base into the other is the most common way to get this wrong.
Janitorial has two sunset mechanisms; construction has one. § 2699.6(d) repeals the construction section on a single date. Janitorial splits the job: § 2699.8(h) repeals the section, while § 2699.8(d) expires the exception for a given CBA at the earlier of that agreement’s end or the same date — so one agreement can fall out of the carve-out before the statute itself sunsets.
| Feature | § 2699.6 — construction | § 2699.8 — janitorial |
|---|---|---|
| The 30% floor is measured on | regular hourly pay rate (cash) | total hourly compensation, benefits included |
| Section repeals (sunset) | January 1, 2038 | July 1, 2028 |
| Earlier per-CBA expiration | — | earlier of the CBA’s expiry or July 1, 2028 |
| Union may grieve for all affected | not stated expressly | stated expressly |
| Reports the agreement to the LWDA | — | within 60 days |
| Duty-of-fair-representation escape | — | PAGA reopens on a DFR breach |
| Amending act | AB 1034 (2024) | SB 646 (2021) |
And the case law both share is thin. The § 2699.8 janitorial conditions have never been construed in a published decision; § 2699.6 has been applied once — in Oswald, a published decision upheld a construction CBA’s express PAGA waiver as satisfying the section as a matter of lawOswald v. Murray Plumbing & Heating Corp., 82 Cal.App.5th 938 (2022). Held that a construction-industry CBA tracking § 2699.6's language clearly waived PAGA and satisfied the section's requirements as a matter of law, reversing the denial of a motion to compel arbitration — and that a memorandum of understanding adopting the exemption's terms could apply retroactively to a pending suit. The one published decision construing the § 2699.6 construction exemption. Decided under the pre-AB 1034 text, but AB 1034 changed only the sunset date — the qualifying-condition language Oswald applied is identical in the current section.. The narrower questions remain: what a closer, less explicit waiver must say — whether it must name the Act or a section, or whether a sufficiently specific arbitration clause suffices — and how the 30% premium is tested period-to-period. Neither has been addressed, and no decision construes either section’s current post-AB 1034 / SB 646 text as of July 13, 2026. This section states the conditions, and marks where the answers are not yet in.
What to do now.#
These are exits, not the main road. Where you stand depends on who you are.
- Confirm every qualifying condition is actually in the agreement — the pay floor, the grievance-and-binding-arbitration route for the same Labor Code violations, and an express PAGA waiver in clear and unambiguous terms. A general arbitration clause is not enough.
- Get the wage base right: construction measures the 30% against the regular hourly pay rate, janitorial against total hourly compensation including benefits. They are not interchangeable.
- Calendar the sunset, and — for janitorial — the 60-day LWDA reporting duty and the earlier per-CBA expiration. The construction carve-out runs to January 1, 2038; the janitorial one to July 1, 2028.
PAGA can be bargained away — but only in two industries, only on exact terms, and only until the carve-out sunsets.