In April 2020, Virginia Governor Ralph Northam signed into law nearly two dozen bills that provide significant new rights for Virginia employees, including new legal protections to combat wage theft. The law became effective on July 1, 2020.
We have published additional updates on other new Virginia employment laws that prohibit non-compete covenants for low-wage workers, expand the scope of the ban on workplace discrimination, and provide enhanced employee whistleblower protections against retaliation for reporting suspected violations of state law or cooperating with law enforcement. You can find those updates here.
To enhance existing wage protections for Virginia workers, House Bill 123 and Senate Bill 838, also known as the Wage Theft Law, provides employees with a new private right of action against an employer for failure to pay earned wages when they are due. With the new right of action, employees, either individually or in a collective action, have the right to proceed directly to court to seek the recovery of unpaid wages.
The expanded right of action provided under the Wage Theft Law has significant consequences for Virginia employers. Until now, Virginia employees did not have the right to sue their employers directly for non-payment of wages. Rather, the only recourse to claim unpaid wages was to file a complaint with the Virginia Department of Labor, which was viewed by many as slow to respond or unresponsive. An expected consequence for Virginia employers will be a significant number of wage payment claims filed against them in Virginia state courts. There, cases are more likely to go to a jury because of procedural rules that limit the ability of courts to dismiss cases on summary judgment.
Potential damages are extensive under the Wage Theft Law. It exposes Virginia employers to the possibility of enhanced damages over and above the principal amount of unpaid wages. It allows for the potential recovery of (1) the amount of wages due, (2) 8% interest from the date the wages were due, (3) an additional amount as liquidated damages, and (4) reasonable attorney fees and costs, if the court finds that the employer knowingly failed to pay wages. In addition, if the court finds that the employer’s failure to pay wages was willful and with intent to defraud the employee, the court is authorized to award the employee triple the amount of wages due and reasonable attorney fees and costs. Employers also may be subject to a civil penalty of up to $1,000 for each violation.
Additional Questions About the New Laws
We will be providing additional updates regarding the new Virginia employment laws. If you have questions about, or need assistance with, the new laws, please contact Doug Taylor at (703) 525-4000 or rdougtaylor@beankinney.com.
This article is for informational purposes only and does not contain or convey legal advice. Consult a lawyer. Any views or opinions expressed herein are those of the authors, and are not necessarily the views of any client.
