Virginia law targets worker misclassification

Companies’ misclassifying their employees as independent contractors continues to be a hot-button issue throughout the country, and Virginia is no exception. In the last year alone, legislation related to independent contractor misclassification was introduced at the federal level and in at least 20 states. New Jersey and California recently enacted employee misclassification laws, and other states including New York are considering similar legislation.

Virginia acts to prevent misclassification

In 2019, Virginia Governor Ralph Northam issued an executive order calling for an interagency task force to make recommendations on how to address the misclassification issue. The study results issued last November found about 214,000 Virginia workers are misclassified as contractors, costing the Commonwealth some $28 million in tax revenues each year.

In response to the task force’s recommendations, the Virginia General Assembly passed legislation to prevent misclassification and penalize employers that misclassify their workers. Governor Northam recently signed the legislation into law, which will take effect on January 1, 2021.

Workers ‘presumed’ to be employees