Virginia has historically been known as a business-friendly state, with relatively few laws enacted specifically for the protection of employees.
That reputation will certainly change as the seismic shift in the political landscape of Virginia has resulted in a virtual tsunami of changes designed to protect employees.
While the Covid-19 pandemic and resulting government-imposed restrictions on businesses have left many Virginia small businesses treading water, they will need to brace themselves for the tidal wave of change that starts on July 1.
Here are just a few changes business owners can prepare for:
- New Virginia minimum wage laws which impose a minimum wage of $9.50 hour as of May 1, 2021 (the original effective date was July 1, 2020). Thereafter, minimum wages will increase on January 1 of each year, starting at $11.00 per hour as of January 1, 2022 and ending with $15.00 per hour as of January 1, 2026.
- Amendments to the Virginia Wage Payment Act which provide, for the first time, a private cause of action to employees and civil penalties.
- New requirements for Virginia pay-stubs (this law actually went into effect January 1, 2020): Employers must provide to each employee, by a written statement, paystub or online system, the employer’s name and address, the number of hours worked in the pay period, the rate of pay, the gross wages earned during the pay period and the amount and purpose of any deductions.
- New worker misclassification laws, effective January 1, 2021, including a presumption that individuals are employees if they perform services for renumeration. An individual or business seeking to rebut this presumption must demonstrate that the individual is an independent contractor using IRS guidelines. There are significant penalties for misclassification, including debarment from public contracts and fines, joint and several liability between general contractors and subcontractors, sanctions from the Board of Contractors, and a private right of action for those alleging misclassification.
- Broad whistleblower protections for employees who engage in conduct such as: good faith reporting of a violation of federal or state law/regulation to a supervisor, governmental body or law enforcement official; employees participating in investigations, hearings or inquiries of governmental body or law enforcement; refusing to engage in a criminal act or refusing to perform an order by the employer that would violate a state or federal statute; or testifying before a governmental body or law enforcement official. The act provides a one-year statute of limitations and grants courts the power to award lost wages and benefits, interest and attorney’s fees.
- Prohibitions on non-compete agreements for so-called “low-wage earners.” By statute, these workers include those earning up to $59,124 per year. In addition to providing a private right of action, the law has a posting requirement.
- A new wage transparency law which bars employers from prohibiting employees from inquiring about, discussing or disclosing to another employee any information about either the employee’s own wages or compensation or any other employee’s wages or compensation. This is likely to catch most Virginia employer’s off-guard as most businesses routinely ban employees from such inquiries. The law imposes a civil penalty of $100 per violation.
- Broadening of the Virginia Human Rights Act and the addition of the Virginia Values Act. The law now includes employers having more than 15 employees. Employers of 6-14 employees are still prohibited from discharging employees on the basis of race, religion, gender, national origin and other bases set out in the VHRA, but now employers of 15 or more are likewise barred, not only from discharging an employee, but from taking any adverse employment action on any of the prohibited bases. The law provides for a private right of action with unlimited damages and attorney’s fees and enlarges the protected classes to include sexual orientation and gender identity, lactation, veteran status and hairstyle. The Act also includes a requirement for employers employing more than 5 employees to provide reasonable accommodation to applicants and employees who are experiencing pregnancy, childbirth or related medical condition, including lactation. Employees alleging a failure of reasonable accommodation can bring an action for damages in the state courts of Virginia within 2 years of the adverse action.
This is only a small summary of the legislative changes. Employers should (1) review their company policies and employee handbooks to ensure compliance with the new laws, (2) properly disseminate the new policies to all employees, keeping record of such dissemination, (3) review discipline and termination procedures and modify as needed, (4) adhere to the posting requirements and (5) train managers and other employees on the new laws.
If you have questions or concerns about this legislation and its impact, please contact us. Our attorneys have extensive experience with employment law and we are happy to work with you in person, over the phone or by virtual meeting so that you can ensure your business is in compliance.