#employmentlaw

Virginia Enacts Overtime Wage Law

by Kristina Vaquera and Shaun Bennett, Attorneys with Jackson Lewis P.C.

Beginning July 1, 2021, Virginia employers will be subject to new state overtime pay requirements. Virginia Governor Ralph Northam signed into law the Virginia Overtime Wage Act on March 31, 2021. Previously, Virginia had been content to rely on the overtime pay requirements of the federal Fair Labor Standards Act (FLSA).

While they differ in certain respects, as with the FLSA the Virginia Overtime Wage Act obligates employers to pay one and one-half times an employee’s regular rate of pay for hours worked in excess of 40 in a workweek. Departures from the federal law include how the regular rate of pay is calculated, a longer statute of limitations to bring potential claims, and the possible damages available.

Rate Calculations

Under the FLSA, an employee’s regular rate of pay is the sum of all remuneration for employment (barring certain statutory exclusions) divided by total hours worked in a workweek.

The state law employs a different calculation that depends on whether the employee is paid on an hourly or a salary basis. For hourly employees, the regular rate of pay is the hourly rate plus any other non-overtime wages paid or allocated for the workweek—not counting the same items that would be excluded from the FLSA calculation—and then divided by the total number of hours worked in the workweek. For employees who are salaried or paid on some other regular basis, the regular rate of pay is one-fortieth (0.025) of all wages paid for the workweek.

Significantly, the new standard for salaried and other regularly paid employees appears to preclude employers from paying traditionally non-exempt employees a fixed salary to cover wages for hours in excess of 40 in a workweek (including on a fluctuating workweek basis), requiring instead an hourly rate calculation for overtime pay for even these employees in most circumstances.

Employers also may face greater liability for misclassifying employees as exempt under the new law. Under federal law, employers commonly argue that a misclassified employee’s salary already covers the employee’s straight-time wages for all hours worked and, therefore, only the additional “half-time” amount is owed for hours in excess of 40. The Virginia Overtime Wage Act eliminates this argument, providing instead that all salaried employees are entitled to one and one-half times their regular rate for any hours worked over 40. In addition to the overtime premium under the FLSA, Virginia employers will need to account for time-and-a-half pay under the new law.

Statute of Limitations

The new further law provides that an employee’s overtime claim may include workweeks in a total span of up to three years. It imposes a three-year statute of limitations on overtime claims, rather than the FLSA’s default two-year limitations period (three years for willful violations).

Liquidated Damages

While the FLSA provides for liquidated damages equal to the amount of unpaid overtime wages, an employer may defend against such a damages claim on the basis that it acted in good faith, with reasonable grounds for believing it acted in compliance with the FLSA’s requirements. This defense is unavailable under the new law, providing instead that all overtime wage violations are subject to double damages—plus pre-judgment interest at eight percent a year. In addition, the law provides for treble damages for “knowing” violations.

Collective Actions

Virginia law typically does not authorize class or collective actions. There are exceptions, but the Virginia Overtime Wage Act is not one of them. Amendments to existing sections of the Virginia Code accompanying the new law authorize collective actions “consistent with the collective action procedures of the Fair Labor Standards Act” for violations under the Act. Thus, Virginia employers face the possibility of defending overtime claims of multiple employees in a collective lawsuit covering workweeks up to a three-year period.

The Takeaway

The Virginia Overtime Wage Act creates the potential for significant liability to employers who fail to properly classify and compensate their employees. Employers are encouraged to review their overtime pay practices to ensure compliance with both the FLSA and the new Virginia law.

If you have any questions about the Virginia Overtime Wage Act or any other wage and hour issue, please consult a Jackson Lewis attorney.

Posted by omgwpadministrator in Law

Where is Virginia on Weed?

by Anne G. Bibeau, Esq. and Jonathan Gallo, Esq.

As part of its surprising swing from the conservative Old Dominion to the most progressive state in the South, Virginia is hurtling towards marijuana legalization. In February 2021, the General Assembly passed two bills for legalization, HB 2312 and SB 1406. Those bills are before Governor Northam for approval, amendment, or veto. As Governor Northam supports the legalization, it appears likely that those bills, or something close to them, will soon become law, making Virginia the 16th state to legalize recreational marijuana.

The legislation grew from reports issued in November by the Virginia Joint Legislative Audit and Review Commission (“JLARC”) study on marijuana legalization and the Governor’s Virginia Marijuana Legalization Work Group. Under the legislation’s current version, Virginia would legalize possession of one ounce or less for those aged 21 or older beginning on January 1, 2024. Retail sales would be permitted beginning that same day, under the regulatory authority and oversight of a new state agency, the Virginia Cannabis Control Authority (“VCCA”). The VCCA is required to develop and administer regulations for the cultivation, manufacture, testing, and retail sale of marijuana and marijuana products, as well as tax rates for marijuana sales.

The legislation would create a licensing structure for the cultivation of marijuana, the manufacture and testing of marijuana products, as well as wholesale and retail sales as well as caps on the number of each type of license. In addition, the legislation would permit home cultivation of up to four marijuana plants for personal use for those aged 21 years or older. At the same time, localities may opt, by public referendum, to prohibit retail marijuana sales, but not cultivation. The legislation would “grandfather” existing pharmaceutical processors under Virginia’s medical cannabis program for all license categories and allow industrial hemp processors to continue under the existing structure for industrial hemp.

The legislation includes certain “social equity” support and resources to communities that have been disproportionately affected by drug enforcement. Programs include a Cannabis Equity Reinvestment Board and Fund, a Cannabis Equity Business Loan Program/Fund, and a Cannabis Public Health Advisory Council. Certain marijuana-related offenses would be expunged, and the penalties for others would be modified. The legislation’s current version does not address the use of marijuana in the employment context.

All eyes are now on Governor Northam to see what he will do with the bills delivered by the General Assembly. Vandeventer Black LLP’s Hemp and Medical Cannabis attorneys are closely monitoring this legislation and are available to assist businesses looking to enter this new marketplace, and employers dealing with the ramifications in the workplace.

Posted by Kim Breeding in Law

Virginia Passes Law Defining Racial Discrimination to Include Hairstyles, Other Historic Traits

by Kristina Vaquera and Milena Radovic
Jackson Lewis PC.   

Virginia has become the fourth state (joining California, New Jersey, and New York) to define racial discrimination to include traits historically associated with race, such as hairstyles. The new Virginia law will go into effect on July 1, 2020.

On March 4, 2020, Governor Ralph Northam signed an amendment to the Virginia Human Rights Act, Virginia Code Section 2.2-3901. While the Virginia Human Rights Act defines “because of sex or gender” or “on the basis of sex or gender,” Section 2.2-3901 failed to define or elaborate on the meaning of “the basis of race.” The new law (SB 50) provides:

The terms “because of race” or “on the basis of race” or terms of similar import when used in reference to discrimination in the Code and acts of the General Assembly include because of or on the basis of traits historically associated with race, including hair texture, hair type, and protective hairstyles such as braids, locks, and twists. 

Significantly, while the new law specifically references hairstyle discrimination, it prohibits discrimination on the basis of race with regards to any traits historically associated with race.

With this change in the law, employers should review their employee handbooks, policies, and training for compliance. Employers should pay particular attention to anti-discrimination and anti-harassment policies, as well as grooming and appearance policies. Employers should review their accommodation policies based on religious or cultural beliefs for compliance with the new law.

In addition, employers should update their supervisory training to take into account the new law as part of any anti-discrimination and anti-harassment training.

Posted by Kim Breeding in Law

Virginia Department of Labor and Industry’s Update on Virginia Wage Payment Statements

by Kristina Vaquera and Milena Radovic
Jackson Lewis PC.   

In 2019, the Virginia General Assembly amended Virginia Code § 40.1-29 to require employers to provide employees with a written statement, by paystub or online accounting, showing the following:

1.       The name and address of the employer;

2.       The number of hours worked during the pay period;

3.       The rate of pay;

4.       The gross wages earned by the employee during the pay period; and

5.       The amount and purpose of any deductions.

The law took effect on January 1, 2020. At the time the bill was passed, many employers wondered whether it would apply to exempt employees as well non-exempt employees as the Code section failed to distinguish between the two. On November 5, 2019, Virginia Department of Labor and Industry issued an announcement explaining that the law applies to all employees, even those who are not paid on an hourly basis, such as salaried and piece work employees.  In the announcement, Virginia DOLI stated that for salaried, piece work employees, and others who are not traditionally paid on an hourly basis, it would not take any steps to enforce the requirement for those until July 1, 2020, and explained that the delay in the enforcement of this policy applies only to the hours of work requirement and does not apply to any other provisions of §40.1-29.

As noted in our previous article, employers affected by the new law should review and update their payroll practices to ensure compliance. They also should review and revise any employee handbook policies dealing with wage statements or timekeeping.

Posted by Kim Breeding in Law

Are General Contractors Liable for Their Subcontractors’ Actions or Inactions?

by Kristina Vaquera, Esq.
Jackson Lewis P.C.

A general contractor in Southern California found itself on the hook for its subcontractor’s failure to pay wages to its workers, even though the general contractor had no knowledge of it. The case illustrates an important reminder for general contractors. The general contractor was fined close to $600,000 under a 2017 California law, A.B. 1701, which holds general contractors liable for their subcontractor’s failure to pay wages owed to workers.

Holding a general contractor responsible is not new or limited to state law. Under most federal employment laws, a general contractor could be found to be a joint employer with its subcontractor, or a temporary staffing agency, when certain conditions are met. In determining if the general contractor is jointly employing workers with its subcontractors, courts will look at the level of control exercised by the general contractor over these workers, as well as intermingling of operations, common ownership, supervision of work, pooling of employees, sharing of clients or customers, and agreements between the companies.

Unexpected and significant consequences for a general contractor may result from its subcontractor’s noncompliance with the law. For example, under the Fair Labor Standards Act, a general contractor found to be a joint employer could be liable for a subcontractor’s failing to pay wages or overtime and misclassifying a worker as exempt or as an independent contractor, among other things.

In addition, more and more courts are looking at whether general contractors should be held accountable for a subcontractor’s alleged harassing or discriminatory conduct under Title VII of the Civil Rights Act.

State and federal agencies and workers may go after a general contractor for joint-employment liability when the subcontractor cannot cover the liability on its own or it is no longer operating, and the general contractor has deeper pockets.

Accordingly, to reduce risk, general contractors should consider carefully who they choose to do business with and take steps to ensure that their business partners are compliant with federal and state laws.

If you have any questions, please contact Kristina Vaquera, 757.648.1448;
kristina.vaquera@jacksonlewis.com .

Posted by Kim Breeding in Law

Change to Virginia Wage Payment Statements on the Horizon

by Kristina Vaquera, Esq. and Milena Radovic, Esq.
Jackson Lewis P.C.

Beginning January 1, 2020, employers in Virginia must provide paystubs to employees on “each regular pay date.”

Currently, Virginia employers must provide only a written statement reflecting the employee’s gross wages and deductions upon the employee’s request.

New Requirements

Virginia Code § 40.1-29 has been amended to require employers to provide employees with a written statement, by paystub or online accounting, showing the following:

  1. The name and address of the employer;
  2. The number of hours worked during the pay period;
  3. The rate of pay;
  4. The gross wages earned by the employee during the pay period; and
  5. The amount and purpose of any deductions.

Employers Covered

The new law applies to an employer, including any individual, partnership, association, corporation, legal representative, receiver, trustee, or trustee in bankruptcy, doing business in or operating within Virginia who employs another to work for wages, salaries, or on commission, as well as any similar entity acting directly or indirectly in the interest of an employer in relation to an employee.

Excluded from the new law are employers engaged in agricultural employment, including agribusiness and forestry. These employers must produce only wage statements reflecting gross wages earned and the amount and purpose of any deductions upon an employee’s request.

Employees Covered

Virginia Code § 40.1-29 does not distinguish between exempt and non-exempt employees. Rather, it applies to all employees, defined by Virginia Code § 40.1-2 as any person who, in consideration of wages, salaries, or commissions, may be permitted, required, or directed by any employer to engage in any employment directly or indirectly.

Therefore, employers must provide wage statements to exempt employees, as well as non-exempt employees.

Penalties

The penalties provision of the statute does not expressly address whether it applies to a failure to provide the required wage statement. However, it is so broadly worded that it may be interpreted to allow a complainant to file a complaint with the Attorney General for a violation of the amendment, and the Attorney General may investigate the complaint.

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Employers affected by the new law should review and update their payroll practices to ensure compliance. They also should review and revise any employee handbook policies dealing with wage statements or timekeeping.

If you have any questions, please contact Kristina Vaquera, 757.648.1448, kristina.vaquera@jacksonlewis.com; or Milena Radovic, 757.648.1444, milena.radovic@jacksonlewis.com, with Jackson Lewis, P.C.

Posted by Kim Breeding in Law

Virginia Employers Required to Provide Copies of Employment Records Upon Written Request

by Kristina Vaquera, Esq. and Milena Radovic, Esq.
Jackson Lewis P.C.

On July 1, 2019, a new amendment to Virginia Code Section 8.01-413.1 will take effect. For the first time, all Virginia employers will be required to provide copies of employment records to employees upon written request. Records reflecting dates of employment, wages or salary during employment, job description and job title and any inquiries sustained by the employee during employment must now be provided within 30 days of receipt of a written request from the employee, current or former, or the employee’s attorney.

If the employer keeps the records in paper or hard copy format, the employer may charge a reasonable fee per page for copying. Likewise, if the employer keeps the records in an electronic format, the employer may charge a reasonable fee for the electronic records.

If the 30-day obligation cannot be met, then the employer must provide written notice of the delay and produce the records requested within 30 days of the notice. Failure to comply can result in a subpoena being issued for the records and possible damages, including expenses such as court fees and attorney costs. 

The statute provides for one very limited exception. Specifically, an employer will not be required to produce the personnel record if there is a written statement included in the employee’s records by the employee’s treating physician or clinical psychologist that in his or her professional opinion that furnishing the records or allowing the employee to review the records would reasonably endanger the life or physical safety of the employee or another person, or that the records reference another person and access to the records would reasonably cause substantial harm to the referenced person. However, the latter provision does not include a heath care provider.

If an employee’s records contain such statements and an employee requests the record, then the employer must produce the records within 30 days of the request, but only to the employee’s attorney or authorized insurer. The employer may not furnish the records to the employee.

While the statute does not contain a specific reference to the length of time limitation such records must be kept by the employer, the amendment requires “all records or papers retained by the employer” shall be produced.  As a result, employers should review their document retention policies when preparing to comply with this change.

Employers in Virginia should also review current handbooks and policies and revise provisions that refer to employment files and records as the property of the employer as well as language that deem requests for records or files by the employee being at the employer’s sole discretion.

If you have any questions, please contact Kristina Vaquera, 757.648.1448, kristina.vaquera@jacksonlewis.com; or Milena Radovic, 757.648.1444, milena.radovic@jacksonlewis.com, with Jackson Lewis, P.C.

Posted by Kim Breeding in Law