Virginia Businesses Should Brace Themselves for Sweeping Employment Law Changes Taking Effect July 1 – Part One

Miles & Stockbridge P.C.

Effective July 1, 2020, Virginia’s employment laws are substantially changing to provide broader protections to employees in many areas. We previously summarized the Virginia Values Act (VVA) here which goes into effect on July 1, 2020 and subjects employers with more than five employees to new state claims for, among other things, gender identity and sexual orientation discrimination and for larger damage awards.

Because of the significance and volume of the new laws going into effect July 1, 2020, we will cover the first three of the new laws (employee misclassification, whistleblower protection, and wage protection, pay transparency and pay stubs laws) in this blog and address the new laws prohibiting low wage employee noncompete agreements, pregnancy discrimination and accommodation, and treatment of marijuana convictions in Part II. These new laws afford some of the broadest protections available to employees and employers should immediately familiarize themselves with their requirements.

Employee Misclassification (Virginia Code § 40.1-28.7:7)

Private Right of Action. Effective July 1, 2020 employees can sue in court for “knowing” misclassifications of employee status and can recover wages, salary, reasonable attorney’s fees, costs and employment benefits, including expenses the employee incurred that would have otherwise been covered by insurance.

Presumption of Employee Status. Effective July 1, 2021 (one year after the misclassification law goes into effect), there will be a presumption that anyone who performs services for remuneration is an employee, unless the employer can prove that the employee is an independent contractor under IRS guidelines.

Public Enforcement and Debarment. The Department of Labor and Industry enforces this law. In addition to civil penalties, upon two or more misclassifications, the employer and any firm, corporation, or partnership in which the employer has an interest will be debarred for one year from entering into contracts with Virginia public bodies and covered institutions.

Anti-Retaliation. Retaliation is prohibited against any individual who reported or plans to report a misclassification or who is requested or subpoenaed regarding a misclassification investigation, hearing, inquiry, or court action.

Whistleblower Protection (Virginia Code § 40.1-27.3)

Virginia’s new Whistleblower Law protects employees for making an internal or external report of a violation of any federal or state law or regulation. Protected activities include:

  • An employee or someone on his/her behalf making a good faith report of a violation of a federal or state law or regulation to any supervisor or governmental body or law-enforcement official;
  • Participation in an investigation, hearing, or inquiry at the request of a governmental body or law-enforcement official;
  • Refusal to engage in a criminal act that would subject the employee to criminal liability;
  • Refusal of an employer’s order to perform an act that violates any federal or state law or regulation where the employee informs the employer that the order is being refused for that reason; or
  • Providing information to, or testifying before, any governmental body or law-enforcement official conducting an investigation, hearing, or inquiry into any alleged violation by the employer of federal or state law or regulation;

Exceptions. An employee’s conduct is not protected if the disclosure is false, in reckless disregard of the truth, if the employee discloses privileged information, or the employee’s disclosure is illegal.

Direct Action and Damages. An employee may sue his/her employer in court without the need to file an administrative charge and may obtain injunctive relief, reinstatement, lost wages, benefits, plus interest and reasonable attorney’s fees and costs.

Wage Protection, Pay Transparency and Pay Stubs. (Virginia Code § 40.1-29)

Private Right of Action. The Virginia Wage Payment Act, which previously did not provide employees a private right of action, was amended to allow employees to sue their employers directly for unpaid wages, including bringing a claim for a collective action for similarly situated co-workers. Alternatively, the Virginia Commissioner of Labor and Industry can investigate claims and institute proceedings on behalf of multiple employees.

Courts can award unpaid wages owed plus an additional amount as liquidated damages, prejudgment interest and attorney’s fees and costs. If an employer “knowingly” fails to pay wages, an employee can recover up to “triple the amount of wages due and reasonable attorneys’ fees and costs.”

Pay Transparency and Enforcement. Employers may not retaliate against employees who inquire about, discuss or disclose wages of other compensation information (expect for employees such as human resources personnel who have access to wage information as part of their job and improperly disclose such information to those without access.) The Commissioner of Labor and Industry enforces this law though a civil penalty of $1,000 per violation.

Pay Stubs. Employers must provide employees with a pay stub each pay period which contains: (1) the name and address of the employer; (ii) the number of hours worked by the employee in the pay period (except for salaried exempt employees); (iii) the employee’s rate of pay for hours works; (iv) the gross wages earned by the employee during the pay period; (v) the amount of and reason for any deductions; and (vi) sufficient information to enable the employee to determined how the gross and net pay were arrived at.

Anti-Retaliation. Employers are prohibited from retaliating against employees for filing a complaint for unpaid wages.


These new laws will dramatically change the employment landscape in Virginia. It is essential for employers to fully familiarize themselves with the new laws and ensure that they are prepared to implement them starting July 1, 2020. Stay tuned for Part II which will cover the new laws prohibiting low wage employee noncompete agreements, pregnancy discrimination and accommodation, and treatment of marijuana convictions.

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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