Employee Status and Wage Protections Under the FLSA and Virginia Law

Wage and Hour
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When it comes to wage violations, a common legal issue is whether the worker is an employee covered by the Fair Labor Standards Act of 1938 (FLSA). This law offers a multitude of legal rights to eligible workers. Some of the most prominent include:

  • Federal minimum wage
  • Overtime pay
  • The 40-hour workweek standard

But only certain types of workers are covered by the FLSA. Which workers you ask? Well, that’s a very good question and one that doesn’t always have a definitive answer.

There are guidelines in place to help classify workers in the FLSA context. But these guidelines are potentially shifting, depending on the court or White House administration.

The U.S. Department of Labor (DOL) enforces the FLSA and currently uses an “economic realities” test for determining if a worker is an employee or independent contractor. This test doesn’t apply to all working relationships. However, it contains a component that’s almost universal in any worker classification test applying state or federal wage law: the level of control the principal/employer has over the worker.

Worker Classification and Control 

Whether you’re applying the DOL’s economic realities test, former President Trump’s proposed (and later withdrawn) “Independent Contractor Status Under the Fair Labor Standards Act” test or California’s ABC Test, you’ll notice that deciding if a worker is an employee often depends on how much (or how little) control the employer has over the worker.

Some employers try to misclassify their employees as independent contractors instead of employees for a variety of reasons. Some of the most common include:

  • Reducing the employers’ potential legal liability for the wrongful conduct of their workers.
  • Avoiding payroll taxes.
  • Getting away with not paying workers overtime.
  • Not having to pay minimum wage.

This last reason is a common motivation employers have for misclassifying workers. This is especially true lately given how more states, including Virginia, are raising their minimum wages.

Many employers try to avoid paying minimum wage by claiming their workers are either not employees under the FLSA, or are exempt employees under the FLSA. This happens in a diverse array of employment settings, but one of the most curious is in the custodial detention setting (jails, prisons, detention centers, etc.)

Are Workers in Prison or Jail Employees Under the FLSA?

As you might expect, the answer to this question is “no.” The FLSA was written to apply to the typical employment setting, one where employees are free to apply for work or quit, subject to contractual obligations.

There are plenty of reasons as to why an inmate or other detained individual is not entitled to minimum wage under state law or the FLSA. But one of the biggest reasons is the level of control the facility has over the detainee.

When an individual is being detained, they have almost no control over their lives. For instance, the facility (“employer”) will decide:

  • When they eat
  • When they go to bed
  • If they will be allowed to work
  • When they can work
  • What they will do for work
  • What they will before and after work

Most work programs that result in monetary compensation for detainees are voluntary, but they lack the “bargained-for” exchange that exists in regular employment settings.

The detainee has no economic or practical negotiating power to ask for different hours, higher wages or different job duties. Additionally, while detainees can decide if they want to work, the facility often gets to decide if they will offer a job to the detainee in the first place.

Some worker classification disputes result in the DOL or a court concluding that the worker was not an employee because the employer exerted too little control over the worker. But in the context of custodial detainment, the worker is not entitled to minimum wage under the FLSA for the exact opposite reason: the “employer” exerts too much control over the worker.

This concept was recently demonstrated in the Fourth Circuit Court of Appeals lawsuit, Ndambi v. CoreCivic, Inc. In this case, the plaintiffs were civilly held as immigration detainees and performed work while detained. Their primary legal argument was that they were entitled to minimum wage under the FLSA.

The Court (which has jurisdiction over Virginia and Maryland) disagreed. Because the plaintiffs were custodial detainees, they weren’t in an employment setting covered by the FLSA due, in part, to the excessive level of control their “employers” had over them.

Is There Such a Thing as Too Much Control to Be an Employee?

In the typical workplace, probably not. It’s hard to imagine an employment situation (outside of a jail, prison or detention center) where you’d otherwise receive FLSA protections and benefits, but don’t because your employer has too much control in how you do your work.

But the above-referenced case is a reminder that worker classification issues aren’t always straightforward. That’s one reason why judicial oversight through litigation is so important for protecting worker rights.

Until recently, workers in Virginia had a limited ability to enforce their rights, especially involving wage violations.

Wage Protections and Rights for Virginia Workers

In 2020, a series of employment laws went into effect in Virginia. Together, these increased the ability of workers to enforce their rights concerning wages.

HB 336 and SB 49 increased the Virginia Department of Labor and Industry’s ability to investigate complaints concerning the non-payment of wages.

HB 337 and SB 48 make it unlawful for employers to discriminate against employees that file a complaint, initiate a proceeding or testify in a proceeding relating to wage violations.

HB 123 amends § 40.1-29 of the Code of Virginia to allow aggrieved employees the right to sue their employers for the non-payment of wages.  If the employer knowingly underpaid its workers, the employee can recover triple the amount of unpaid wages along with reasonable attorney fees and costs.

SB 838 is similar to HB 123, but applies the right to sue to the general contractor/subcontractor setting.

Together, these form a formidable array of worker rights to ensure the proper payment of wages. These are also in addition to any enforcement rights the workers have under the FLSA.

Summing It Up

The FLSA is the most prominent wage law, but it doesn’t apply to all workers. Some employers try to take advantage of this by misclassifying their workers.

The more control an employer has over a worker, the more likely the worker is an employee. However, this concept doesn’t always apply, such as when the worker is being criminally or civilly detained.

Regardless of where individuals work, they need laws in place to enforce their rights. In addition to the FLSA, states can enact their own wage enforcement laws as Virginia did in 2020.