New Vosh Policy Effective July 1, 2015 to Prevent Worker Misclassification

Posted on by William R. Mauck, Jr. in Construction

Effective July 1, 2015, the Virginia Department of Labor and Industry will implement a new Occupational Safety and Health (VOSH) policy to combat misclassification of workers. Misclassification occurs when an employer improperly classifies a worker as an independent contractor who should in fact be an employee.

According to a public service announcement from the Department: "Misclassification of workers as independent contractors constitutes payroll fraud, and denies hard-working Virginia employees of basic legal protections such as workers' compensation, family and medical leave, and unemployment insurance. Misclassification also cheats those honest employers and contractors who properly classify employees, since employers who misclassify can undercut their bids due to lower operating costs."

During a VOSH workplace inspection, if the Department has reasonable cause to believe that worker misclassification has occurred, the following actions will normally be taken:

  • In the event that VOSH citations and penalties are proposed for the employer, penalty reductions for size and good faith WILL NOT be afforded to the employer.
  • On construction multi-employer worksites, EACH CONTRACTOR, whether general contractor, subcontractor or lower tier subcontractor, will be asked to provide proof of its contractor's license AND proof of the licensing of any of its subcontractors.
  • When it is determined that a construction employer has contracted with an unlicensed subcontractor, VOSH will make a written referral to the Department of Professional and Occupational Regulation (DPOR) for the contractor and its unlicensed subcontractor. DPOR may assess sanctions for contracting with unlicensed subcontractors to include fines, probationary terms, or suspension or revocation of the contractor's license.
  • In cases where the contract value for the specific subcontractor's job is less than $1000.00, VOSH will make a written referral to the Virginia Employment Commission and/or the Virginia Workers' Compensation Commission for potential audits of the employer's employment practices. There may be instances where referrals will be made for contract values over $1000.00.

About the Author

William R. Mauck, Jr. is an experienced commercial litigator specializing in representing clients in the construction industry. A firm believer in active legal risk management throughout the life of a project, he advises clients during the negotiation and formation of contracts, throughout the construction of a project and, if necessary, in resolving disputes through mediation, arbitration or litigation as necessary to bring a project to conclusion.

Spotts Fain publications are provided as an educational service and are not meant to be and should not be construed as legal advice. Readers with particular needs on specific issues should retain the services of competent counsel.