Employment relationship

State-specific laws

What state-specific laws govern the employment relationship?

On July 1, 2021, the Virginia Overtime Wage Act (VOWA) was enacted, resulting in state overtime pay laws that deviated significantly from the federal requirements under the Fair Labor Standards Act (FLSA). Beginning on July 1, 2022, Virginia will substantially return to the overtime standards that applied prior to VOWA. Under HB 1173, Virginia employers who violate state overtime pay requirements “shall be liable to the employee for the applicable remedies, damages, or other relief available under the [FLSA].” Virginia employers will again be able to use the “fluctuating workweek” method prescribed by the FLSA to pay non-exempt employees a fixed salary to cover wages for hours worked in excess of 40 hours in a workweek. Finally, HB 1173 should alleviate employers’ liability for misclassifying employees as exempt under VOWA and ensure that all overtime exemptions available under federal law will also be available under Virginia law.

Notably, the amended version of VOWA will retain the remedy for employees to file claims for employer overtime violations in state court, whether under federal law, state law, or both.

Virginia Code § 40.1-27 prohibits persons doing business in the Commonwealth from “willfully and maliciously” preventing or attempting to prevent an employee who was discharged or voluntarily left “from obtaining employment with any other person.”

Virginia Code § 40.1-28.01 prohibits an employer from requiring “an employee or prospective employee to execute or renew any provision in a nondisclosure or confidentiality agreement that has the purpose or effect of concealing the details relating to a claim of sexual assault.”

Who do these cover, including categories of workers?

These provisions cover employers, prospective employees, exempt employees, and non-exempt employees.

Misclassification

Are there state-specific rules regarding employee/contractor misclassification?

Virginia Code § 40.1-28.7:7 creates a civil cause of action for an individual who has not been “properly classified as an employee,” if the employer knew of the individual’s misclassification. Damages may be awarded in the amount of any wages, salary, employment benefits, or other compensation lost to the individual, as well as attorneys’ fees and costs. An individual who performs services for a person for remuneration is presumed to be an employee of the person that paid such remuneration, and that person is presumed to be the employer of the individual performing the services. This presumption may be rebutted by showing that the individual is an independent contractor, pursuant to the Internal Revenue Service guidelines.

Contracts

Must an employment contract be in writing?

Under Virginia law, an employment contract need not be in writing to be enforceable. Employment contracts are governed under the same laws, regulations, and principles as other contracts.

Are any terms implied into employment contracts?

Virginia law favors a strong presumption of at-will employment relationships. In other words, an employment contract which does not specify a time period for the duration of employment creates a rebuttable presumption that the employment is terminable at-will, by either party.

A narrow exception exists where the termination of an at-will employee violates a well-defined public policy in Virginia. The Bowman public policy exception is recognized when: (1) an employer violates a policy enabling the exercise of an employee’s statutorily created right; (2) the public policy violated by the employer was explicitly expressed in the statute and the employee was clearly a member of that class of persons directly entitled to the protection enunciated by the public policy; and (3) the discharge was based on the employee’s refusal to engage in a criminal act. To succeed, an employee must identify a Virginia statute establishing a public policy which was violated by the employer.

Are mandatory arbitration agreements enforceable?

Virginia Code § 8.01-581.01 creates a presumption that a binding arbitration clause, made in writing, is considered “valid, enforceable and irrevocable.” This presumption of validity can be overcome upon a showing of contractual grounds that would make such an agreement unenforceable.

How can employers make changes to existing employment agreements?

Employment contracts are governed under the same laws, regulations, and principles as other contracts. Accordingly, employers can modify existing employment agreements, provided such modifications are made in accordance with contract law.