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Employment Law Alert

Employment Law Alert: Major Changes to Virginia Employment Laws Effective July 1, 2020

July 2, 2020

While the much-anticipated increase to Virginia’s minimum wage has been postponed until 2021…Virginia employers will be directly impacted by four new employment laws that went into effect on July 1, 2020. These new laws provide more protections and rights to employees in the areas of employment discrimination, narrow the reach (and use) of non-compete agreements, address the misclassification of workers and expand whistleblower protections. While each warrants its own ALERT, the key takeaways you need to know now are:

Virginia Values Act – brings material amendments to the Virginia Human Rights Act

  • Protected classes expanded to prohibit discrimination on the basis of:
    • Sexual orientation (1st southern state including LGBTQ)
    • Gender identity
    • Veteran status
  • Race discrimination definition to include traits historically associated with race—
    • Hair texture and Hair types
    • Protective hairstyles, i.e. braids, locks & twists
  • Applies to all private employers with 15+ employees
  • Employees have “private right of action” after exhausting administrative remedies
  • Increased remedies: in addition to back pay and reasonable attorney’s fees—uncapped compensatory damages, punitive damages up to the state cap and injunctive relief
  • Expanded protections for pregnancy, childbirth and related medical conditions and lactation—requiring reasonable accommodation and “private right of action” for enforcement

Virginia Bans Non-Competes for “Low-Wage” Employees

  • Employers are prohibited from entering into, enforcing, or threatening to enforce covenants not to compete with any low-wage employee from July 1st forward
  • The “Low Wage” threshold, currently $1,137 per week, is subject to several considerations
  • Exception for nondisclosure agreements intended to prohibit the taking, misappropriating, threatening to misappropriate, or sharing of certain information
  • Employers are subject to a civil penalty of $10,000 for each violation and plaintiffs are entitled to recover “reasonable costs,” including costs and reasonable fees for expert witnesses and attorney fees from employers attempting to enforce a non-compete clause
  • IMPORTANT:  Employers must post a copy or summary of this law; failure to post will result in a written warning for the first violation, a civil penalty of up to $250 for a second violation, and a civil penalty of up to $1,000 for a third and each subsequent violation

Misclassification of WorkersEnhanced Scrutiny, Enforcement and Consequences

The Virginia Legislature has targeted the misclassification of workers as independent contractors instead of employees through a series of statutes:

  • Code 40.1-28.7:7 creates a private right of action for individuals who have been misclassified as independent contractors
    • Creating liability for the knowing misclassification by employers
    • Allowing damages to be awarded in the amount of “any wages, salary, employment benefits, including expenses incurred . . . or other compensation lost to the individual, a reasonable attorney fee, and the costs incurred . . . in bringing the action.”
  • Code 40.1-33.1 prohibits retaliatory action against an employee or independent contractor for (i) reporting that an employer has failed to properly classify an individual and failed to pay the required benefits; or (ii) after being asked to participate or provide information regarding a misclassification investigation to the appropriate authority
  • Code 58.1-1900 extends the presumption of an employer-employee relationship and makes the Department of Taxation responsible for determining whether an individual is an independent contractor by applying IRS guidelines

Whistleblower Protections Expanded

Employees are now protected from retaliation by employers for engaging in the following:

  1. Reporting in good faith violations of any federal or state law or regulation to a supervisor or to any governmental body or law-enforcement official;
  2. Participating in an investigation, hearing, or inquiry by a governmental body or law-enforcement official;
  3. Refusing to engage in a criminal act that would subject him or her to criminal liability;
  4. Refusing to comply with employer’s order to perform an action that violates any federal or state law or regulation;
  5. Participating and providing information to any governmental body or law enforcement official regarding any alleged violations by the employer.

 

MORE INFORMATION

The contents of this Alert are for informational purposes only and do not constitute legal advice. If you have any questions about this Alert, please contact the Shulman Rogers attorney with whom you regularly work or a member of the  Shulman Rogers Employment and Labor Law Group.