Small business owners should be aware of a new Virginia policy that aims to reduce the number of misclassified workers. The policy took effect July 1, 2015.
The Virginia Department of Labor and Industry has launched a campaign to crack down on misclassified workers, following Gov. Terry McAuliffe’s action to “root out” the practice. The department created the Virginia Occupational Safety and Health Compliance Program policy (VOSH) to go after any unlawful practice related to the misclassification of workers. The policy seems to unfairly target the construction industry.
Employers have different responsibilities and greater burdens as a result of many new regulations, including those under the Affordable Care Act. However, these same requirements may not apply to independent contractors. For those small business owners who utilize independent contractors, this is a big deal.
Misclassifying workers can have severe consequences and be an expensive mistake that could result in a federal or state audit. Under the new policy, the department may issue citations for any violations it finds during VOSH safety inspections.
Because many of the VOSH inspections are conducted by safety
inspectors on construction sites, NFIB members who are contractors may
experience more issues with the new policy. Here are elements of the new policy:
1.
VOSH
safety inspectors will have the authority to cite cases of worker
misclassification where they have reasonable cause to believe it’s occurred.
2.
If there are any VOSH citations, the employer
will not be afforded any penalty reductions for size and good faith.
3.
On construction multi-employer worksites, each
contractor (e.g., general contractors, prime subcontractors and lower tier
subcontractors) will be asked to provide proof of their Department of Professional
and Occupational Regulation (DPOR) contractor’s license AND proof of the DPOR
license for any of its’ subcontractors.
4.
When it is determined that a construction
employer has contracted with an unlicensed subcontractor, VOSH will make a
written referral to DPOR for the contractor and its unlicensed subcontractor
(DPOR sanctions for contracting with unlicensed subcontractors may include
fines, probationary terms, suspension or license revocation).
5.
VOSH will likely make written referrals to other
agencies for potential audits of the employer’s employment practices. Some of those agencies could be the to the
Virginia Employment Commission (VEC), the Department of Taxation, and the
Virginia Workers’ Compensation Commission (VWCC).
NFIB/VA will continue to diligently follow this issue to
ensure that small businesses are not unfairly targeted and that any future
proposals to combat misclassification of workers are reasonable and
necessary. If you encounter any issues
with the Department’s new VOSH policy, please make sure you make us aware of
the situation. Also, if you utilize
independent contractors, please let us know so we can keep you informed of any
new developments. You can reach Virginia
State Director Nicole Riley via email at [email protected] or by calling
804.377.3661.
A complete copy of the new policy and education
and outreach materials can be found at www.doli.virginia.gov
