As we previously reported on April 23 and April 27, 2020, in the midst of the COVID-19 pandemic dominating the news, Virginia Governor Ralph Northam recently signed into law a slew of bills passed earlier this year by the General Assembly that transform Virginia’s employment laws. This is the third in a series of alerts discussing the groundbreaking new laws governing workplace discrimination, worker misclassification, wages, restrictive covenants, and employee whistleblowers. Parts 1 and 2 are here and here.
Significant expansion of Virginia’s wage payment law
Governor Northam signed into law two somewhat conflicting bills (H.B. 123 and S.B. 838) amending Virginia’s wage payment statute (Va. Code § 40.1-29). Both bills create a private cause of action against an employer who fails to pay wages in accordance with the law’s requirements. S.B. 838 also establishes additional criminal and civil liabilities for contractors and subcontractors. Damages in both bills include wages due plus statutory interest, an additional equal amount as liquidated damages, and reasonable attorney’s fees and costs. For a knowing violation, an employee can recover an amount equal to triple the amount of wages due plus reasonable attorney’s fees and costs. The law broadly defines “knowingly” as where the employer (i) has actual knowledge of the information, (ii) acts in deliberate ignorance of the truth or falsity of the information, or (iii) acts in reckless disregard for the truth or falsity of the information. Proof of actual intent to defraud the employee is not required. The statute of limitations for a wage payment action is three (3) years. The Virginia Code Commission will codify the amendments, which take effect on July 1, 2020.
Effective July 1, 2020, H.B. 336 and S.B. 49 expand the authority of the Virginia Department of Labor and Industry (VDOLI) to investigate and enforce the state’s wage payment law, including the authority to institute an action without receiving a written complaint from an employee or obtaining an employee’s signed consent. In addition, H.B. 337 and S.B. 48 broadly prohibit retaliation by an employer against an employee who reports wage theft to VDOLI. They also expand VDOLI’s authority to institute proceedings on behalf of an employee for retaliation. Remedies include reinstatement, lost wages, and an additional amount equal to the lost wages as liquidated damages.
Effective March 10, 2020, H.B. 689 clarifies certain amendments to Virginia’s wage statement requirements that had previously become effective January 1 of this year, but that did not distinguish between hourly and salaried employees. See Va. Code § 40.1-29(C). Employers must now provide employees paid hourly or paid a salary below the U.S. Department of Labor’s minimum salary threshold for exempt employees (currently $35,568 annually) with a written wage statement specifically showing (i) the number of hours worked; (ii) the rate of pay; (iii) the gross wages earned during the pay period; (iv) the amount and purpose of any deductions; and (v) information sufficient to enable the employee to determine how the gross and net pay were calculated.
Minimum wage increase
H.B. 395 and S.B. 7 increase the state minimum wage initially to $9.50 per hour and incrementally thereafter to $15.00 per hour by January 1, 2026, with continuing annual increases based on the consumer price index. Historically, Virginia’s minimum wage law broadly excluded persons covered by the federal Fair Labor Standards Act. The new law, effective on the May 1, 2021, following an amendment by Governor Northam to delay the effective date, applies to all non-exempt employees, except certain handicapped workers under 29 U.S.C. § 214(c) and certain seasonal workers under 29 U.S.C. § 214(a)(3), among other specific state law exclusions.
For more information on developments in these areas or their impact on your business, please contact Betty Graumlich at email@example.com, Mark Passero at firstname.lastname@example.org, or the Reed Smith lawyer with whom you normally work.