Virginia Tightens Enforcement Pertaining to Employee Misclassification
Published by Eric A. Welter on October 20, 2015
As the repercussions of the California Labor Commission’s June 2015 ruling in Uber v. Berwick that an Uber driver was an employee and not an independent contractor continue to unfold, state legislatures and agencies are continuing to drive a renewed enforcement focus against employers who rely on independent contractor classification for personnel who likely should […]
As the repercussions of the California Labor Commission’s June 2015 ruling in Uber v. Berwick that an Uber driver was an employee and not an independent contractor continue to unfold, state legislatures and agencies are continuing to drive a renewed enforcement focus against employers who rely on independent contractor classification for personnel who likely should be treated as employees.
In June 2015, the Virginia Department of Labor & Industry released a new policy specifically established to “assure to the fullest extent of the law that the rights of employees and employers are protected from worker misclassification”.
Specifically, the new policy allows for the agency’s Virginia Occupational Safety & Health (VOSH) inspections and investigations to encompass and pursue more vigorous enforcement pertaining to employee misclassification issues.
Among the provisions noted in the new policy are these two key points:
1. Employers cited for misclassification violations will not be eligible for penalty reductions for size or good faith.
2. When VOSH visits multi-employer construction worksites, each individual contractor (general, prime, sub, etc.) will be asked to provide proof of their Department of Professional and Occupational Regulation (DPOR) contractor’s license -and- for proof of the DPOR licenses for any of its’ subcontractors.
Additional provisions authorize VOSH to refer companies to the Virginia Employment Commission (VEC) and the Virginia Workers’ Compensation Commission (VWCC) for possible audits of employment practices, especially in cases where a given contract value is less than $1,000.
The policy is directly tied to two previous actions including a 2012 report issued by the Virginia Joint Legislative Audit and Review Commission (JLARC) and an Executive Order signed by Governor Terry McCauliffe in August of 2014.
The policy also details the seven primary factors that VOSH will use in making misclassification determinations, and the process that VOSH will follow for reporting and acting upon possible instances of misclassification, once identified. It also reiterates the significance of the state’s revised civil penalty for violations of the Virginia Workers Compensation Act, which was raised to $250 per employee, per day (up to a penalty of $50,000) in July 2014.
Virginia employers, including very small companies and those engaged in areas of business commonly involving multiple employers together (such as government contracting and construction) must give special attention to the proper classification of personnel in their companies and throughout their subcontractor networks as well. Virginia is taking a leading role in developing and implementing wide-ranging interagency policy directives that can rapidly identify and respond to any instances in which employers appear to be misclassifying personnel.Topics: Construction, Employee Classification, Government Contractors, Independent Contractors, Virginia