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Virginia’s Employee Misclassification Law

Were you asked to sign an Independent Contractor Agreement? If so, under Virginia law you may have been misclassified and entitled to damages.

In 2020 the Virginia General Assembly passed legislation to deter companies from misclassifying their employees and penalizing employers that misclassified their workers. This legislation was in response to a study in Virginia that revealed that approximately 214,000 Virginia workers were misclassified as independent contractors.

A true independent contract is an individual who is in business for himself or herself. They control their work environment, invest their own money and they are not economically dependent on the companies for which they work. By contrast, an employee generally is not in business for himself or herself and is more economically dependent on the companies for which they work.

The Virginia misclassification law creates a presumption that individuals paid remuneration for performing services are employees of the person paying them, and the person that pays such remuneration is presumed to be the employer, “unless it is shown that the individual is an independent contractor as determined under the Internal Revenue Service Guidelines.” Virginia Code § 40.1-28.7:7(B). This effectively shifts the burden to the putative employer to establish that the work was not misclassified under the IRS Guidelines.

Generally, the greater the workers’ control and independence the more likely that the worker is an independent contractor. Conversely, the less control that the worker has over his or her work environment and the more dependent that the worker is on the company, the more likely that the worker is truly an employee. In making this assessment the IRS Guidelines call for consideration of three categories of factors: behavioral control and independence; financial control and independence; and type of relationship.

Under Virginia’s misclassification law, if a worker is misclassified as an independent contractor, the Court may award the worker “damages in the amount of any wages, salary, employment benefits, including expenses incurred by the employee that would otherwise have been covered by insurance, or other compensation lost to the individual, a reasonable attorney fee, and the costs incurred by the individual in bringing the action.” Virginia Code § 40.1-28.7:7(A).

If the Court finds that misclassification occurred, the employer will have to pay the employee what they would otherwise have received if they had been properly classified as an employee. This includes such things as medical expenses that otherwise would have been covered by insurance, wages, vacation time, other benefits available to employees along again with the employees’ attorney fees and costs.

In Virginia, the statute of limitations for filing a lawsuit against an employer for misclassifying an employee is two (2) years.

If you believe that your employer misclassified you, it may be beneficial to consult an experienced employment lawyer. A lawyer can determine whether you are an employee or an independent contractor under the law. If you have questions about this issue, please feel free to contact this author or any of the attorneys at Ford Richardson, PC.


Should you have any questions about the issues discussed here or other legal issues, please do not hesitate to contact the lawyers at Ford Richardson.

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