By Tricia Dunlap Esq.
~9-10 Minute Read
6 New Laws In The Virginia Values Act
The Virginia Values Act went into effect on July 1st, 2020. This was a significant law in Virginia that our General Assembly passed in the last session and it has some really important provisions for business owners to understand because it’s going to impact your terms with your employees and how you conduct yourself as an employer in Virginia. Let’s get into the first couple of provisions.
You may have heard of this act. It was covered widely in the newspaper because it gave new expanded protections for employees who are LGBTQ and prevents them from being fired simply because of their LGBTQ status, however, most of the media coverage didn’t go into other provisions in the Act that are really significant to Virginia employers and I want to talk about those.
New Discriminatory Actions
First of all, the Virginia Values Act contains a relatively long list of actions by employers that are now considered discriminatory. That could result in lawsuits for businesses that have more than 15 employees. Even relatively small businesses need to understand what is considered “discriminatory actions” under the Virginia Values Act, so that you don’t unknowingly discharge an employee for reasons that it turns out are discriminatory under the law.
Furthermore, even businesses with as few as six employees could be subject to legal claims that there was a wrongful discharge. The expansion of what’s considered “discriminatory acts” will be a significant issue for business owners to understand in the coming months. I’ll have a blog post with more details on this soon.
New Protections For Whistleblowers
Secondly, there are also now broad protections for employees who report violations of any federal or state law or regulation. This protection for whistle-blowers is now much broader than it used to be under Virginia law. If you have an employee who blows the whistle on your business practices because they believe you violated any federal or state law, you have to be very cautious not to retaliate against that employee and take other steps to make sure that you haven’t done that,
Classifying Employees and Independent Contractors
Third, this is a really important law for small business owners to understand especially if you have employees. Although, if you have independent contractors, you also need to understand this law. Here’s why.
If you misclassify your workers as independent contractors when really they meet the test of being employees, then you’re in a lot of new jeopardy because of the Virginia Values Act that started July 1st, 2020.
Penalties For Misclassifying Employees
Fourth of all, the employee can now sue you for misclassifying them. They can recover their lost wages and any benefits they might have been entitled to had they been classified as employees. They can also recover expenses that should have been covered under health insurance if they as employees would have been eligible for health insurance with your company, and because they were misclassified they didn’t get that coverage and incurred expenses because they didn’t have coverage. They can now seek recovery for those costs against you. Finally, they can recover their attorney’s fees and costs.
Aside from being sued by someone who should’ve been classified as an employee but was instead classified as an independent contractor, you could also face government enforcement actions. The Virginia Values Act creates a new division within the Attorney General’s office to investigate claims that employees make under the Virginia Values Act, the Virginia Human Rights act, and other Virginia employment laws.
As a result, if you misclassify someone who should’ve been an employee as an independent contractor and they complain to the Attorney General’s Office, then you could find that you’re subject to an enforcement action from the Attorney General’s Office. That could mean a civil penalty for any tax payments that you should’ve made on behalf of that employee had they been an employee.
Violations could also result in being barred from government contracts if you are bidding on government contracts. Finally, if you are found to have violated the law, then your violation will be reported to all other Virginia agencies so that they’re aware of your violation.
It’s really important that Virginia businesses correctly classify their employees. If someone meets the test of being an employee and not an independent contractor, then you need to make them a W-2 employee. The jeopardy is just too great at this point to continue classifying them as an independent contractor.
New Non-Compete Provisions
Another thing I want to talk about under the Virginia Values Act is that non-compete provisions for employees in their employment agreements may no longer be valid. There’s a complicated formula around this and it has to do with how much the employee is paid. It’s not clear whether or not this would impact non-compete provisions between businesses. Related to perhaps one business’ clients after a purchase or sale, but certainly it is clear that non-compete provisions that apply to employees making at a certain threshold or below it. Making a wage below that threshold, that those are now going to be banned starting July 1st, 2020. It’s important to understand that provision as well.
Employees Can File Grievances at State Court
Now, here’s the last piece and this one’s really important. Until now, employees in Virginia who had a grievance against their employer, generally had to pursue those grievances in federal court. That was a forum that was not very plaintiff-friendly. It was easier for employers to prevail in federal court. Because of the Virginia Values Act, the employees can now bring their claims in state court. Most attorneys believe this is going to be a much more plaintiff-friendly venue and that employers who are subject to claims under the Virginia Values Act and find themselves in state court probably have a harder case to win than if they had been brought into federal court.
These are six of the important changes int he Virginia Values Act that’s effective as of July 1st, 2020.
Contact Dunlap Law
If you need help understanding these new laws and complying with the Virginia Values Act, then please get in touch.
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