This photo was taken a few months ago when attorney Anne Bibeau and I co-presented at Vandeventer Black annual conference. Anne and I have collaborated for several years, working with clients, doing speaking engagements and enjoying regular lunch dates. Earlier this year, she shared her expertise on cannabis in the workplace.
Anne is back today to outline the new employment laws hitting the books for Virginia-based employers. There are many changes and probably quite a bit of work to be compliant by the July 1, 2020 deadline.
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Here’s Anne Bibeau’s analysis of the new laws:
While you were distracted with the COVID-19 crisis, Virginia enacted a number of surprising laws that chip away at its staunchly pro-employer reputation. It is impossible to understate the magnitude of the change in Virginia employment law in 2020. Previously, Virginia had few employment laws and provided few employee rights. The General Assembly in 2020, however, passed several laws greatly expanding employee rights and providing new causes of action, and monetary damages, against employers. Businesses need to understand these changes and take steps now to reduce their risk of liability. This article highlights the major changes and urgent action items for employers by July 1, 2020, when all these new laws become effective.
Employment Law: Expanded Discrimination Protections
The new law Virginia Values Act provides comprehensive protection against discrimination for LGBTQ+ by expanding the list of protected classes. It adds sexual orientation and gender identity to the list of protected characteristics against which employers cannot discriminate. The Virginia Human Rights Act, which previously applied to businesses with between five and 14 employees, has been expanded to create a cause of action for unlawful discharge against any business with five or more employees.
The law provides that an employee may recover damages to compensate for the employee’s loss, punitive damages, attorneys’ fees, and costs. Unlike suits brought under the federal Title VII anti-discrimination law, damages under the Virginia Human Rights Act are not capped. Further, litigation under the Virginia Human Rights Act will be riskier for businesses because it will typically proceed in state court, which generally does not permit summary judgment; therefore, it will be harder to avoid a jury trial.
What employers need to do:
- Revise handbook policies
- Train employees on these new employment protections.
- Confer with legal counsel on whether arbitration agreements may be prudent for your business.
Employment Law: “Wage Theft Law” Allows Employees to Sue Employers for Wages
The Wage Theft Law provides Virginia employees with a new private cause of action to sue their employers, either individually or as a collective action, for alleged unpaid wages. Successful plaintiffs can recover unpaid wages, an equal amount as liquidated damages, prejudgment interest, and attorneys’ fees and costs. If the employer’s violation was “knowing,” the plaintiff can recover treble (i.e., triple) damages.
What employers need to do:
- Review timekeeping and payroll practices
- Train supervisors to ensure that all time worked is recorded and compensated.
- Confer with legal counsel on whether arbitration agreements, which can be used to limit collective actions, are a prudent solution for your business.
Alleged Independent Contractors Can Sue Businesses for Misclassification
Individuals alleging that they were employed and misclassified as independent contractors may sue the business. This new law creates a rebuttable presumption that anyone who “performed services for remuneration” is an employee. The business bears the burden to rebut that presumption by proving that the individual was properly classified as an independent contractor under the IRS’s guidance. A successful plaintiff can recover back pay, benefits—including costs that would have been covered by insurance if the employee had been provided employee benefits—attorneys’ fees, and costs. Businesses also face civil penalties, ranging from $1,000 to $5,000, for each employee misclassified as an independent contractor. Further, the business can be barred from bidding on Virginia public contracts for up to two years.
What employers need to do:
- Identify all individuals currently classified as independent contractors.
- Confer with legal counsel on whether the classification is proper.
Employment Law: New Discrimination Protections for Pregnant Employees
The new law prohibits and creates a private cause of action for, discrimination based on pregnancy, childbirth, and related medical conditions like lactation. The law also requires reasonable accommodations for the same. Businesses must provide their employees with notice of this prohibition against discrimination and right to a reasonable accommodation. The notice must be posted in conspicuous places, included in the handbook, given to all new hires (including men!), and given to any employee who announces she’s pregnant.
What employers need to do:
- Revise handbooks to include a notice of these provisions
- Post a notice in the workplace
- Provide notice to all new hires and to any employee who announces her pregnancy.
- Train management on the obligation to provide reasonable accommodations and engage in the interactive process.
Non-Compete Agreements Are Banned for “Low Wage” Employees
The new law prohibits employers from entering into, enforcing, or threatening to enforce a covenant not to compete with so-called “low wage” employees earning less than $59,124 per year. Further, “low-wage employee” includes interns, students, apprentices, or trainees, paid or unpaid, as well as independent contractors compensated at an hourly rate that is less than the median hourly wage for the Commonwealth, which is currently $20.30.
What employers need to do:
- Post a copy of the law, or summary approved by DOLI (there isn’t one yet), in their workplaces.
- Identify those employees with restrictive covenants who earn less than $59,124 per year. Confer with legal counsel on how to address any such agreements that you already have and whether there are alternative protections available for your business.
- Discontinue any practice of requiring so-called “low wage” employees to enter into such agreements.
And Finally…. Minimum Wage Increases Begin in 2021.
On May 1, 2021, Virginia’s minimum wage will increase to $9.50/hour. It will rise again to $11.00 on January 1, 2022, $12.00 on January 1, 2023, $13.50 on January 1, 2025, and $15.00 on January 1, 2026.
What employers need to do:
- Review current payroll to identify all workers currently making less than $9.50 per hour.
- Budget for increased costs in straight time and overtime.
These costly changes could not have come at a worse time for businesses, many of which are reeling from the COVID-19 crisis. Nonetheless, businesses must review their existing policies and procedures now to reduce risk under these new laws. We expect to see a dramatic increase in Virginia employment litigation in the coming years.
For legal advice, contact Anne G. Bibeau, Esq. at Vandeventer Black LLP. Anne is the firm’s Labor & Employment Law Practice Group Manager. She focuses her practice on labor and employment law and the emerging hemp industry. She can be reached at ABibeau@VanBlackLaw.com, 757-446-8600.
