How Virginia’s New Non-Compete And Wage Laws Help Employees

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Virginia’s legislature recently enacted a series of laws that take a few modest steps in helping Virginia employees fight back against employers who take advantage of them.

Specifically, they raise the minimum wage, allow employees to discuss their wages with each other, provide the ability to take legal action for the non-payment of wages and prohibit the use of non-compete agreements with certain employees. All of these laws go into effect on July 1, 2020.

HB 330 and SB 480: No More Non-Competes for Low Wage Earners in Virginia

“Low wage” employees in Virginia cannot be subject to non-compete agreements under the recently passed HB 330 and SB 480. The term, “low wage” is defined as a wage that’s lower than the average weekly wage in Virginia, which is roughly $1,100 per week. These new laws cover both paid and unpaid workers, including interns and students. Both of these laws have identical wording and provide for a number of rights and protections for low wage employees.

First, employers cannot enter into, enforce or threaten to enforce a non-compete agreement with a low wage employee. This law also explicitly allows a low wage employee to work for the employer’s clients or customers, as long as the employee didn’t solicit the client or customer.

Second, eligible employees may enforce their rights by bringing suit against anyone who attempts to enforce a non-compete agreement. Besides stopping the enforcement of a non-compete, a plaintiff may also recover liquidated damages, lost compensation, damages and reasonable attorney’s fees and costs. The statute of limitations for bringing suit is two years.

Third, employers may not retaliate or discriminate against a low-wage employee who brings suit under this law.

Fourth, employers who defy this law are subject to a $10,000 fine for each violation.

Fifth, employers must inform their employees of these rights, including placing a copy of this law (or authorized summary of the law) where other employee rights notices are posted.

HB 395 and SB 7: Raising the Minimum Wage in Virginia

Although delayed in its implementation because of the coronavirus, HB 395 and SB 7 will raise the minimum wage in Virginia to $9.50 per hour beginning May 1, 2021. The minimum wage will then continue to rise as follows:

  • Starting January 1, 2022: $11.00 per hour
  • Starting January 1, 2023: $12.00 per hour
  • Starting January 1, 2025: $13.50 per hour
  • Starting January 1, 2026: $15.00 per hour

The new minimum wage law applies to most non-exempt employees. However, there are several employee exceptions to the minimum wage requirements. Some of these excepted workers include:

  • Farm employees
  • Golf course caddies
  • Those working in sales that receive compensation in the form of a commission
  • Taxicab drivers

HB 336 and SB 49: Expanded Investigative Powers Into the Non-Payment of Wages

Virginia’s Department of Labor and Industry (DOLI) already has the power to investigate allegations of non-payment of wages. But thanks to the identically worded HB 336 and SB 49, DOLI now has the ability to expand these investigations.

During the course of a non-payment of wages investigation for a specific employee, should the DOLI suspect other employees have also not been properly paid, the DOLI can decide on its own to start investigating those possible wage violations. And if violations are found, the DOLI can initiate proceedings on behalf of the aggrieved employees.

HB 337 and SB 48: Employers May Not Retaliate Against Employees for Wage Violation Complaints

HB 337 and SB 48 are relatively straightforward as laws go. Both have the same wording, which prohibit employers from discriminating against employees because they have filed a complaint, started a proceeding or testified in a proceeding relating to wage violations.

If a violation takes place, the employee can file a complaint with the DOLI which may initiate proceedings on the employee’s behalf. If violations exist, the employee can potentially recover lost wages, liquidated damages equal to the amount of lost wages and get reinstated to the employee’s prior position.

HB 622: Employees Can Discuss Each Other’s Wages

One way employers depress the wages of workers or get away with unequal pay is by prohibiting employees from discussing their wages with each other. HB 622 aims to change that by barring employers from retaliating against employees because they:

  • Asked other employees about their compensation.
  • Discussed compensation with other employees.
  • Disclosed their compensation to other employees.
  • Filed a complaint alleging a violation of HB 622.

If an employer violates this law, they must pay a civil penalty of up to $100 for each violation.

HB 123 and HB 838: Private Cause of Action Against Employers for Non-Payment of Wages

Section 40.1-29 of the Code of Virginia outlines employer requirements concerning employee wages, such as frequency and form of compensation. HB 123 amends § 40.1-29 by allowing aggrieved employees (individually or with other affected employees) to sue their employers for the non-payment of wages.

Employees can recover double the amount of unpaid wages, prejudgment interest and reasonable attorney fees and costs. However, if the employer knowingly fails to pay wages, the employer is liable for triple the amount of unpaid wages, plus reasonable attorney fees and costs.

For the most part, SB 838 provides for the same rights and benefits as HB 123, but it has one major difference. When it comes to the enforcement of non-payment of wages, SB 838 treats general contractors and subcontractors as employers if employees of the subcontractor do not get paid. However, liability for non-payment of wages will only apply if:

  • The general contractor knew or should have known that the subcontractor was not paying its employees properly;
  • The construction contract does not relate to a single residential home; and
  • The value of the project is greater than $500,000.