Hertz has been sued under California's Private Attorneys General Act (PAGA) over claims that it failed to pay workers for time spent off the clock. Law360 reported on October 2, 2026 that the car rental company faces a new PAGA action alleging it shorted hourly employees by rounding recorded time instead of paying for actual minutes worked. PAGA lets an individual employee, known as an "aggrieved employee," sue on behalf of the State of California and other workers to recover civil penalties for Labor Code violations, with the state's Labor and Workforce Development Agency named as a party of record. This case targets how Hertz tracked and paid its California hourly workforce, not a nationwide practice, since PAGA only applies to work performed in California.
Table of Contents
- What the Lawsuit Claims
- Who This Affects
- Why "A Few Minutes" of Unpaid Time Still Counts
- What a PAGA Case Can and Cannot Recover
- A Pattern of Wage Disputes at Hertz
- What Isn't Public Yet
- Frequently Asked Questions
What the Lawsuit Claims
The complaint centers on unpaid time that built up around the edges of employees' shifts. According to Law360's October 2, 2026 report, Hertz is accused of stiffing workers on full pay by rounding their recorded hours rather than compensating them for the minutes they actually worked. Two specific practices anchor the claim.
The suit alleges employees had to wait off the clock to access a timekeeping terminal before they could officially clock in, and that this waiting time went unpaid. It also alleges workers were required to respond to work-related messages during breaks and after their shifts ended, again without pay for that time, per the same Law360 account. These allegations describe a pattern familiar in wage-and-hour litigation: small amounts of time, repeated across shifts and employees, that add up to meaningful unpaid wages over a pay period or a year.
Who This Affects
The lawsuit's reach is limited to Hertz's California hourly workforce, specifically rental-location and counter staff who use the company's timekeeping terminal, according to Law360. PAGA is a California-specific enforcement mechanism, so employees working for Hertz outside the state are not covered by this particular action. Within California, the claims appear to apply broadly to employees subject to the terminal clock-in process and after-hours messaging demands described in the complaint, rather than to a single location or job title.
Why "A Few Minutes" of Unpaid Time Still Counts
A common employer defense to small, scattered unpaid time is the "de minimis" doctrine, which excuses tiny amounts of work time as too trivial to bother compensating. California law closed that door. The California Supreme Court ruled in Troester v.
Starbucks that regularly required off-the-clock work must be paid even when it amounts to just a few minutes a day, according to summaries of that 2018 ruling. That standard is directly relevant here. If employees were made to wait for terminal access or answer messages on a routine basis, California law treats that time as compensable regardless of how short each instance was. Hertz cannot rely on the minutes being small to avoid liability for the underlying practice.
What a PAGA Case Can and Cannot Recover
PAGA cases work differently from a typical wage class action, and the distinction matters for anyone following this case expecting a direct payout. A prevailing PAGA plaintiff recovers civil penalties for Labor Code violations, split 75% to the state and 25% to affected employees, but PAGA itself does not recover the underlying unpaid wages, under the California Supreme Court's 2019 ruling in ZB, N.A. v.
Superior Court, as explained by Brightmine's HR Center. In practice, that means a PAGA judgment or settlement in this case would likely translate into penalty payments rather than back-pay checks matching each worker's actual unpaid hours. Employees seeking the wages themselves typically need a separate wage claim or class action alongside, or instead of, a PAGA action.
- PAGA penalties: paid mostly to the state, with a smaller employee share
- Unpaid wages: not recovered through PAGA itself
- Separate wage claims: the avenue for recovering actual back pay
A Pattern of Wage Disputes at Hertz
This is not Hertz's first run-in with California wage-and-hour claims. A 2015 putative class action accused the company of not paying employees for time worked through breaks and of shorting overtime pay, according to Law360's 2015 coverage.
That dispute led to a settlement of roughly $1.75 million in 2019, covering about 2,250 California employees over denied rest breaks and unpaid overtime dating back to October 2013, as reported at the time. The current PAGA complaint raises overlapping themes, unpaid time tied to required but uncompensated activity, though it involves a different set of practices: terminal wait times and after-hours messaging rather than break denials.
What Isn't Public Yet
Several details of the case remain outside public view. The specific plaintiff's name, the court or county where the complaint was filed, and the exact penalty amount being sought are contained in the full complaint, which sits behind Law360's paywall and was not independently located in court-docket searches, per Law360's October 2, 2026 reporting. Anyone tracking the case for a potential claim should watch for a docket number or settlement notice, since PAGA actions typically resolve through either a court judgment or a negotiated settlement that then faces court approval.
Frequently Asked Questions
Will affected Hertz employees get back pay from this lawsuit?
Not directly through PAGA. PAGA recovers civil penalties, mostly paid to the state, rather than the unpaid wages themselves, per the ZB v. Superior Court ruling summary.
Does this lawsuit cover Hertz employees outside California?
No. PAGA only applies to work performed in California, so the claims are limited to the company's California hourly workforce, according to Law360.
Can Hertz argue the unpaid time was too small to matter?
California courts have rejected that defense for routinely required off-the-clock work, even a few minutes per day, under Troester v. Starbucks.