The Brief

As lobbyists for businesses and labor groups negotiate with Gov. Gavin Newsom’s administration on how to amend a unique California labor law that allows workers to sue their bosses, the two sides seem to agree on at least one puzzling reality.

The law, known as the Private Attorneys General Act, generates millions each year for a state fund reserved for enforcing state labor laws, including those against wage theft. But despite rising worker complaints of labor violations and severe understaffing hampering the state Labor Commissioner’s Office’s response, California leaves much of the money untouched.

The money comes from the state’s cut of the settlements and fines that businesses pay in response to these lawsuits. For years, the fund has grown faster than lawmakers and Newsom have directed it to be spent, according to state budget documents. In 2022-23 they left $197 million in the fund unspent; the 2023-24 budget leaves $170 million.

The state draws from the fund each year for portions of the Labor Commissioner’s budget, as well as other agencies. And the fund has paid for some worker outreach and enforcement. Those programs include $8.6 million in recent grants to 17 local prosecutors to pursue criminal charges in wage theft cases, and a pandemic-era partnership with community groups to inform workers in 42 different languages about workplace rights.

But the fund’s single biggest use in the past five years has been to shore up the state budget. In 2020, the state borrowed $107 million from the labor fund for other uses. In April, an early budget deal between Newsom and legislative leaders allowed the state to borrow another $125 million as they sought to reduce a record shortfall.

Neither of these loans need to be repaid until at least 2027. The administration has proposed to leave $119 million in the fund unused in the 2024-25 budget it’s negotiating with lawmakers this month. They’re seeking to cover the remaining $28 billion shortfall.

The fund’s use has frustrated businesses and labor groups alike, who say the state should spend much more of the money to help the Labor Commissioner’s Office hire or retain more staff needed to process a record number of workers’ wage theft claims.

In response to questions from CalMatters, Department of Industrial Relations spokesperson Erika Monterroza wrote in an email that the loans are not unusual during budget deficits and only come from money that’s not being used. She said $7.6 million from the fund is already allocated this year to processing wage claims.

But the department has struggled to fill those new positions. A state audit released in May found the staff shortages are caused in part by a slow hiring process and salaries that are lower than some comparable state and local government jobs.

Monterroza said it’s out of her department’s hands whether the money could be used to increase salaries or speed up hiring, saying that must be bargained with state employee unions. Newsom’s office declined to comment, referring questions to the department.

The fund is also part of the negotiations between business and labor on potential changes to the Private Attorneys General Act to take a business-backed measure to repeal the law off the November ballot. Recent polling suggests voters support a legislative fix over a ballot measure. The sides face a June 27 deadline for the Legislature to approve changes.

If a deal is reached to avert the costly ballot measure, it is likely to address how to spend the enforcement fund.

“The Labor Commissioner’s Office has hundreds of millions currently available,” said Kathy Fairbanks, a spokesperson for the coalition of employers sponsoring the ballot measure. “We strongly support using these funds to quickly hire and train staff to help resolve employee claims.”

Between 30,000 and 40,000 workers a year file wage theft claims with the office. The state audit found chronic understaffing has led to a backlog of 47,000 cases, and the claims regularly take six times longer than the time state law allows to resolve.

Lorena Gonzalez, leader of the California Labor Federation and a former state Assemblymember, said labor groups have advocated in past budgets to allow Labor Commissioner Lilia García-Brower to use the money to address the backlogs.

“Obviously we have a crisis and we have been asking and pushing the Legislature and the governor to beef up spending, to hire up,” Gonzalez told CalMatters. “We were having a hard time getting attention. It’s one of many examples that it’s not a priority to process wage theft claims.”

The Assembly’s current and former labor committee chairpersons, San Jose Democrat Ash Kalra and Hayward Democrat Liz Ortega, both declined to comment through spokespersons. Sen. Lola Smallwood-Cuevas, a Los Angeles Democrat who leads the Senate labor committee, could not be reached for comment last week.

California Chamber of Commerce CEO Jennifer Barrera also said she supported using available money to increase staff.

Still, an agreement for the state to appropriate the funds depends on broader negotiations about the scope of the PAGA law.

The two-decade-old state law allows the Labor Commissioner’s office to outsource the role of suing employers over alleged labor violations to private attorneys, with a worker standing in as plaintiff on behalf of the state and their coworkers. Most suits are brought over wage theft claims, according to a UCLA Labor Center report.

Business groups have pushed to repeal it for years, arguing it primarily enriches lawyers while subjecting businesses to frivolous cases over technical violations. Their ballot measure would direct cases back to the Labor Commissioner’s Office, where Fairbanks said workers stand to keep more money if they win individual wage theft claims.

Labor advocates say that would only worsen the backlogs at the Labor Commissioner’s Office, and take away an option for workers to bring workplace-wide suits against problem employers.

Gonzalez said even if the enforcement funds are spent on beefing up Labor Commissioner staff, the law should still stand. The May state audit concluded the office would need nearly 900 employees to efficiently process all wage claims. That’s almost triple the positions currently approved for the office — and a third of those are vacant.

“The Labor Commissioner itself is not equipped to handle all the cases we’re seeing in California today,” Gonzalez said. “We’re not fine with taking away the right of employees to sue.”

The United States evacuated diplomats as attacks intensified across the Middle East, with drones striking the U.S. Embassy in Saudi Arabia, while President Trump signaled the conflict with Iran could turn into an extended war.

Israel said it sent ground forces across the border into southern Lebanon and bombed Beirut suburbs as fighting with the Iran-backed group Hezbollah resumed after more than a year.

The U.S. and Israel kept up their attacks in Iran, where the death toll rose Tuesday to 787 people, according to the Iranian Red Crescent Society. Explosions were heard in Iran's capital of Tehran and other parts of the country.

Trump said Monday that the war could last four to five weeks, but could go longer than that.

In a social media post, Trump said that the U.S. had a "virtually unlimited supply" of munitions. "Wars can be fought 'forever,' and very successfully, using just these supplies," Trump wrote.

Israeli Prime Minister Benjamin Netanyahu told Fox it would not lead to an "endless war."

The war has so far killed six U.S. service members, according to the Pentagon, which warns that more casualties are expected.

Ten people in Israel have died since Iran began retaliating with missile attacks there.

Here are more of the key updates NPR is reporting on.

To jump to specific areas of coverage, use the links below:

U.S. Embassies | Americans evacuate | Lebanon | U.S.-Israeli strikes on Iran | Strait of Hormuz | Global natural gas

U.S. Embassy in Saudi Arabia hit

The U.S. Embassy in Saudi Arabia Tuesday urged Americans to avoid the compound after the Saudi Defense Ministry said the diplomatic post had been attacked by two drones.

Saudi Arabia's Foreign Ministry called it "a flagrant Iranian attack" in the Saudi capital of Riyadh.

There were no immediate reports of injuries. The Defense Ministry said the drone strikes caused "limited fire and minor damage" to the U.S. Embassy.

The State Department has ordered evacuations of diplomatic missions in several Middle Eastern countries.

This comes after an Iranian attack on the U.S. Embassy in Kuwait on Monday. The embassy said on social media Tuesday that it was closing until further notice.

In Jordan, the State Department said Tuesday it had evacuated its large embassy in the Jordanian capital Amman after threats against it.

Iran has been striking Gulf countries like the United Arab Emirates that are normally considered safe in retaliation to U.S. attacks that started Saturday. Iran has also hit commercial targets after warning that it would attack American interests across the region.

Amazon said Monday that two of its data centers in the UAE and one of its centers in Bahrain were hit by drones, affecting their operations.

— Jane Arraf and Hadeel Al-Shalchi

Americans urged to leave several countries

The State Department urged Americans to leave more than a dozen countries and territories in the Middle East because of the conflict, even as options to leave narrowed with flight cancellations and airport closures.

Americans need to "DEPART NOW from the countries below using available commercial transportation, due to serious safety risks," Mora Namdar, the State Department's assistant secretary for consular affairs, said in a post on X.

The countries and areas included:

• Bahrain
• Egypt
• Iran 
• Iraq
• Israel 
• Jordan 
• Kuwait 
• Lebanon
• The West Bank and Gaza 
• Oman
• Qatar
• Saudi Arabia 
• Syria 
• United Arab Emirates
• Yemen
  

— Ayana Archie

Israel resumes strikes in Lebanon, targeting Hezbollah

The Israeli military said soldiers were "operating in southern Lebanon" as it continues strikes against Hezbollah, including in the Lebanese capital.

Israel and Lebanon signed a ceasefire in November 2024 but Israel has continued almost daily strikes since then. Iran-backed Hezbollah had refrained from attacks until Sunday, when it launched strikes in retaliation for the killing of Iranian Supreme Leader Ayatollah Ali Khamenei.

The Israeli military said Tuesday it targeted what it called Hezbollah command centers and weapons storage facilities in Beirut's southern suburbs.

"Let me be clear: this is not a ground maneuver into Lebanon. It is a tactical step to create an additional layer of security for the residents of northern Israel," said Israeli military spokesperson Lt. Col. Nadav Shoshani describing the Israeli troop movements.

Thousands of Lebanese streamed out of Dahya, the suburb where Hezbollah, a political party as well as paramilitary group designated a terrorist organization by the U.S. and some other Western countries, is based.

They joined what the government says are at least 30,000 Lebanese fleeing Israeli strikes in south Lebanon and in Beirut. Shelters were so over-crowded some families resorted to laying out blankets on sidewalks of the corniche, Beirut's sea-side.

The Lebanese government says 52 people have been killed in Israeli airstrikes since Saturday.

— Jane Arraf

U.S. and Israel continue to strike Iran

In the Iranian capital, residents heard the sound of explosions overnight. There were no immediate reports of what had been hit.

Israel's military said it struck Iran's intelligence ministry and state broadcaster. The Israeli authorities also said that they are now focusing on targeting Iran's missiles and launchers.

Iranian missile strikes on Israel have significantly decreased. Israel says Iran may be rationing munitions gearing up for a long war.

An official in the region who spoke on condition of anonymity tells NPR Israel thinks it can achieve its war goals in two weeks total. Israeli officials say they want to create the conditions for Iranians to topple their government.

In Iran's southern city of Minab, a mass funeral was held for 165 people — most of them young girls — killed in an attack on a girls school Saturday. Many of the bodies had been buried under rubble.

The U.S. military said it was looking into reports of missiles hitting the school. The Israeli military said it was unaware of its forces operating in the area.

Some in the large crowd attending the funeral chanted "Death to America," "Death to Israel" and "No surrender."

Iran's Red Crescent Society said Tuesday at least 787 people have been killed in attacks on 153 cities across the country.

Ten people have been killed in Israel since the start of the conflict, according to Israeli officials.

— Daniel Estrin and Jane Arraf

Iran says it closed the Strait of Hormuz

Iran continued to threaten ships near the Strait of Hormuz, the narrow waterway vital to Gulf oil exports.

"The Strait of Hormuz is closed. Anyone who wants to pass, our devotee heroes in the IRGC navy and the army will set those ships on fire," security official Brig. Gen. Ebrahim Jabbari, said Monday. "Don't come to this region."

In a sign of the vast repercussions of the war, Japan's Foreign Minister Toshimitsu Motegi told an Iranian envoy that Iran must reopen the waterway.

Global natural gas supplies greatly reduced

In addition to the effect of the closure of the Strait of Hormuz on oil supplies, about 20% of the world's liquified natural gas, or LNG, is shipped through the Strait. On land, Iranian strikes hit Ras Laffan, the world's largest LNG export plant in Qatar. State-owned QatarEnergy says it has shut down LNG production.

Many countries are somewhat insulated from the disruptions in oil flows because they have oil in strategic reserves. But natural gas is a different story, says Anne-Sophie Corbeau,  a global research scholar at the Columbia University's Center on Global Energy Policy. Gas storage levels are particularly low because it's the end of winter.

" This is absolutely massive," Corbeau says. "It's going to impact everybody who is importing LNG."

Oil prices have risen since trading opened Monday, and so have natural gas prices in Asia and Europe. Energy experts say that higher gas prices and reduced LNG flows out of the Persian Gulf is highly profitable for LNG exporters elsewhere, including in Australia, Indonesia, Malaysia and the U.S. The U.S. is the biggest exporter of LNG and is set to open a new LNG terminal in Texas soon.

— Julia Simon

Jane Arraf and Hadeel Al-Shalchi reported from Amman, Jordan; Daniel Estrin reported from Tel Aviv, Israel; Ayana Archie from Washington; Julia Simon from San Francisco.
Copyright 2026 NPR

This first week of March will bring warm temperatures, plenty of sunshine and some windy conditions.

Coastal communities will wake up to some morning low clouds, even some patchy fog, followed by afternoon sunshine. Temperatures at L.A. County beaches will reach 67 to 72 degrees, but hover around the low 60s for Orange County beaches. Most of the region, including downtown L.A., should see highs in the low to mid 70s.

Valley communities and the Inland Empire will see highs mostly in the upper 70s, and up to 81 degrees in the western San Fernando Valley.

In Coachella Valley, the highs today are expected to reach up to 88 degrees.

As the cost of living continues to pinch Californians, state lawmakers have a new focus: bringing down the cost of housing construction to get more homes built quickly.

Their solution, so far, is to industrialize the building process by facilitating prefab, modular and manufactured housing. Earlier this year, a group of California lawmakers held a series of hearings as part of the Select Committee on Housing Construction Innovation to understand what barriers stand in the way of scaling up factory-built construction.

It comes after lawmakers last year passed a series of bills that streamlined environmental reviews for housing developments and transformed the way housing is built near transit.

“A key piece of making housing more affordable is bringing down the cost of construction,” Committee Chair and Assemblymember Buffy Wicks (D-Berkeley) said in a statement to KQED. “Factory-built housing is not a silver bullet, but it can be part of the solution to our housing crisis.”

A report, published Monday, from UC Berkeley’s Terner Center for Housing Innovation, found factory-built housing, also known as prefab and manufactured housing, could cut costs by up to 20% and slash building timelines in half — a key innovation needed to ramp up construction and meet the state’s goal of building 2.5 million homes by 2030.

A Factory OS employee work on the assembly process of modular homes at the Vallejo warehouse on August 6, 2020.

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Beth LaBerge

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KQED

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But, these projects face big hurdles in securing financing and overcoming a patchwork of regulatory approvals that can vary by jurisdiction. Following the committee’s Construction Innovation hearings, state lawmakers now plan to introduce their own package of bills aiming to streamline the process.

Those efforts will dovetail with legislation at the federal level, where lawmakers are also trying to solve the nation’s growing housing affordability crisis, caused in part by a construction slump. Federal legislators are currently working on two separate bill packages taking aim at red tape and outdated safety standards which lawmakers on both sides of the aisle argue have prevented factories from churning out housing for decades.

And while there has historically been resistance from unions to factory-built housing, there is a growing recognition of the benefits to workers. Jeremy Smith, deputy legislative director for the State Building and Construction Trades Council of California, said during a committee hearing that while the trades prefer on-site construction methods, modular-built housing “provides a solution to building — to actually building — more housing for people of all income levels.”

He pointed to Fullstack Modular, a construction company with a factory in Carson, Ca., which employs about 200 unionized workers to construct modular homes. He said working in a factory, as opposed to commuting long hours to job sites, benefits employees.

“Because of the consistent work hours and the factory location within the community, trades workers and more crafts people are able to consider the trades and still accommodate childcare and other life needs,” he said. “Workers who have not secured reliable transportation, for example, can more easily get to the stationary location of the Carson factory, making their transition into the building trades easier.”

Factory-built housing is not necessarily new in California. For years, a number of construction firms have offered modular housing or prefabricated units, which can be manufactured miles away and assembled on site. But many of those firms have failed to scale up and have shuttered their factories.

Michelle Boyd, chief strategy officer for Terner Labs, a nonprofit incubator program connected to the Terner Center, said the construction industry hasn’t changed in decades and neither have the laws or financing systems surrounding it.

“The construction industry has worked the way it’s worked for 100 years,” she said. “And there are many different silos. Every player has their own little piece of the puzzle on how you put a house together or an apartment together.”

But industrialized construction consolidates that system into one factory, and that, in turn, runs up against regulatory and financing norms, which makes it difficult for new types of construction to successfully enter — and stay — in the market.

When it comes to regulations, the Terner Center’s report details inconsistencies between local governments’ building codes as one barrier to be removed. Although the state has adopted a set of standards for housing built in factories, local governments still require certain plan reviews and inspections, which can change a standardized product into a bespoke project for each city.

On the finance side, banks and insurance agencies have funded traditional site-built housing for decades, so they understand the risks involved. But factory-built construction has yet to meet mainstream adoption, which means financial institutions have less data and experience to gauge risk. That makes it harder to access capital needed to get projects off the ground.

Boyd said that because developers sometimes have trouble finding financing, it means deals can fall through, resulting in holes in the factories’ production pipeline. When that happens, she said, “They can’t sustain that because they have to pay the wages, and so they close.”

But she argues, the state could work to assume some of the risk of the transaction and stabilize the pipeline so those holes don’t exist.

“One of the main policy areas that we uncovered is a role potentially for the state in helping hold some of that risk, so we’re not really asking these developers to risk losing a lot of money or having the deal go upside down halfway through,” she said.

Taken together, Boyd said, these proposed reforms, if implemented, could have the potential to jumpstart the industry, bringing down the cost of construction for builders, and hopefully, for homeowners too.

L.A. city leaders will discuss on Wednesday whether to pull hundreds of millions of dollars out of the regional homelessness agency and assign different oversight.

L.A. County supervisors voted to withdraw funding for the L.A. Homeless Services Authority last April, citing ongoing problems with the agency's oversight of homelessness funds.

Now 10 months later, City Council members are planning to talk about whether to pull the city’s funds from LAHSA — which amount to just under $300 million this fiscal year.

It’s one of the most consequential decisions on homelessness city officials have faced in years. In deciding the future of LAHSA, the City Council will be deciding who will be entrusted with taxpayer funds meant to address the nation’s largest unsheltered homeless population.

What the council will discuss

On Wednesday, the council’s Housing and Homelessness Committee is scheduled to discuss a range of options that include:

• not changing anything major
• keeping the city money at LAHSA, but beefing up city oversight
• shifting the funding from LAHSA to direct city control
• shifting the city’s funding from LAHSA to the county homelessness department to administer it

The committee also is scheduled to discuss whether to pursue shifting the city’s federal homelessness funding from LAHSA to more direct city control.

The options were first laid out in a staff report to delivered last April, just over a year after it was requested by Councilmember Monica Rodriguez.

At a City Council meeting in January, Rodriguez criticized housing and homelessness committee chair Nithya Raman for not scheduling a committee discussion on the options.

“It's been sitting [for] 280 days, a report in your committee that you won't hear,” Rodriguez said at the January meeting. “So let's stop playing this false notion of the arsonists showing up as the firefighters.”

Asked for a response Monday, Raman’s spokesperson Stella Stahl told LAist the item is on Wednesday's agenda.

In a statement, Raman said she expects to hold two meetings to discuss all the city’s options before the council makes a decision.

Raman and Mayor Karen Bass urged the county not to pull funding from LAHSA last spring, saying the agency was making progress on homelessness.

The supervisors went ahead last April with their decision to withdraw the more than $300 million in annual county funding from the agency.

The vast majority of county funds will be shifted from LAHSA starting July 1.

Raman recently announced she’s running in the June primary against Bass, whom she previously endorsed for re-election.

LAHSA is in ‘crisis,’ its CEO says

LAHSA was created by the city and county in 1993 to oversee homeless services. It’s governed by a CEO who reports to a commission of 10 members. Half of the members are appointed by the L.A. mayor, and the other half by each of the five county supervisors. Bass also serves on the commission, having appointed herself in fall 2023.

While it’s long faced criticism, it’s been under particularly close scrutiny for more than a year.

An audit and court-ordered review found it failed to properly track its spending and whether services were being provided.

LAHSA also has been facing criticism more recently for months-long delays in paying tens of millions of dollars to reimburse service providers — a problem officials vowed to fix nearly two years ago. Several providers recently told LAist they've had had to dip into reserves or take on debt.

While addressing the commission that oversees the organization on Friday, CEO O’Neill said LAHSA was “in crisis. And I say this not as a criticism to any of our really hardworking staff. They've built what they were asked to build.”

LAHSA’s staff report to “essentially 21 elected bosses, all of whom have different, sometimes conflicting agendas,” O’Neill said. “This creates a structure that is unstable.”

“LAHSA has been structured for decades as the entity that takes the blame,” she added. “Political incentive…has been to point at LAHSA rather than to address structural issues.”

“Morale is very low,” O’Neill said of LAHSA staff.