Virginia: New Employee-Friendly Regulations Coming This Summer

On April 22, 2020, the Virginia 2020 General Assembly Session reconvened and passed a number of bills impacting employment practices.  Virginia employers will need to get ready for numerous changes, which include new regulations on LGBT anti-discrimination measures, wage theft prevention, worker misclassification, and more.  All are effective July 1, 2020 (unless otherwise noted below).

LGBT Discrimination Prohibited

SB 868 prohibits private employers of 15 or more employees from discriminating on the basis of sexual orientation, including an individual’s actual or perceived heterosexuality, bisexuality, or homosexuality.  Discrimination based on an individual’s gender identity, inclusive of gender-related identity, appearance, or other characteristics with or without regard to the individual’s assigned sex at birth is also prohibited.

Public employers, businesses offering public accommodations such as general public goods, service, facilities, or accommodations, creditors, and housing and real estate industries are likewise prohibited from discriminating on the basis of sexual orientation or gender identity.

Workplace Discrimination Lawsuits

In addition to expanding LGBT protections, the new law expands claimant’s ability to sue for violations of any anti-discrimination laws. Previously, employees could only bring a lawsuit under the Virginia Human Rights Act if the individual was terminated from employment as a result of alleged discrimination or retaliation. With the new law, employees will be able to sue for any violation of the anti-discrimination laws, even if they have not been discharged from employment.  Additionally, employees may be able to recover compensatory and punitive damages, as well as increased amounts of lost wages and reasonable attorneys’ fees.

Wage Theft Prevention

HB 123/ SB 838 provides employees a private right of action to bring lawsuits against employers for allegedly unpaid wages.  Employees may be able to recover not only owed wages with interest, but also recovery of treble damages and a $1,000 civil penalty fine per violation.  If an employer is found to have committed knowing violations, courts may award attorneys’ fees and/or criminal penalties.  The Wage Theft Law also forbids employers from taking retaliatory action against employees who file a complaint or are involved in proceedings related to the Wage Theft Law.

Restrictive Covenants

HB 330/SB 480 prohibits employers from entering into or enforcing restrictive covenants against low-wage employees, defined as individuals whose average weekly earnings are less than the average weekly wage of the Commonwealth.  It also expressly includes interns, students, apprentices, paid or unpaid trainees, or even independent contractors who earn an hourly rate less than the median hourly wage for the Commonwealth.  Employers must post a DOLI-approved notice in the workplace.

Decriminalization of Marijuana

HB 972/SB 2 decriminalizes marijuana possession offenses (up to one ounce) making them into civil violations, and seals records related to prior convictions under the previous marijuana law.  Employers may not require an applicant to disclose information about decriminalized marijuana convictions.

Required Information on Wage Statements

HB 689 requires employers to report certain information on employee wage statements.  Virginia employers must include the number of hours worked during the pay period on wage statements if the employee is either paid on an hourly basis, or earns a salary less than the standard salary level adopted by the U.S. Department of Labor.

Worker Misclassification

Three new laws were passed that target worker misclassification:

• HB 1199 prohibits employers from taking adverse action against employees or independent contractors who report or plan to report suspected misclassification to authorities.
• HB 984 creates a private cause of action allowing individuals who are not properly classified as employees to bring a civil action against the employer where the employer knowingly misclassified the worker.
• Effective January 1, 2021, HB 1407 creates the presumption that a worker performing services for an employer for remuneration will be considered an employee, unless the worker or employer demonstrates that the worker is an independent contractor. The Department of Taxation (DOT) will utilize IRS guidelines to determine if a person is an independent contractor.  Further, if an employer fails to properly classify a worker after receiving notice of the misclassification from the DOT, the DOT will notify all public bodies and covered institutions.  These entities may not award public contracts to violating employers for a certain time period, depending on the number of the employer’s offenses.

Action Items