Virginia Wage Payment Act Now Provides Meaningful Remedies to Wage Theft Victims
Virginia has enacted important amendments to the state’s wage payment laws that drastically strengthen employees’ ability to confront wage theft. In April 2020, Governor Northam signed Senate Bill 838 and House Bill 123, which amend the Virginia Wage Payment Act.
In a press release, Governor Northam stated, “Every Virginian deserves access to a safe and well-paying job. These new laws will support workers and help our economy rebound as quickly as possible from COVID-19. I am grateful for the General Assembly’s ongoing partnership as we address these critical issues.”
The Virginia Wage Payment Act already regulated the time and manner in which employers had to pay their employees. In addition, the law prohibited an employer from making certain deductions from wages and limited an employer’s ability to reduce an employee’s compensation. The law, however, lacked a meaningful enforcement mechanism, which caused Virginia courts to characterize the statute as regulatory and not remedial. The amendments now provide employees meaningful relief that will almost certainly send lasting reverberations throughout wage theft law.
Kudos to Kim Bobo and Ben Hoyne of the Virginia Interfaith Center, Senator Adam Ebbin, Delegate Jennifer Carroll Foy, and all the advocates who fought hard to enact this important legislation.
Does the Virginia Wage Payment Act provide a remedy to victims of wage theft?
Yes. Most importantly, the amendments to the Virginia Wage Payment Act provide employees with the right to sue in court to recover unpaid wages. VA Code § 40.1-29. Previously, only the Virginia Department of Labor and Industry could do so. Before the amendments, victims of wage theft had to rely on breach of contract or a theory called quantum meruit for relief. Mar v. Malveaux, 732 S.E.2d 733, 738–39 (2012).
When do the changes to the Virginia Wage Payment Act go into effect?
The amendments to the Virginia Wage Payment Act become effective July 1, 2020. VA Code § 1-214.
What counts as a “wage” under the Virginia Wage Payment Act?
The statute does not define “wages.” Virginia courts, however, have described wages as “a compensation given to a hired person for his or her services.” E.g., Commonwealth/Dep’t of Transp. v. Swiney, 477 S.E.2d 777, 778 (1996). Wages include performance-based bonuses and commissions. See, e.g., Blanchard v. Capital One Servs., LLC, 91 Va. Cir. 320 (2015) (citations omitted).
Which employees and employers are covered by the Virginia Wage Payment Act?
The statute also does not specify who is a covered employee or employer. However, the right to sue to recover unpaid wages applies to all employees, and liability extends to all employers.
What remedies does the Virginia Wage Payment Act provide to employees who are victims of wage theft?
The law’s amendments provide for strong remedies. A successful employee will recover any owed wages. In addition, the statute mandates that a prevailing employee is entitled to:
- Liquidated damages (double damages for all violations and treble damages for knowing violations);
- Prejudgment interest; and
- Reasonable attorneys’ fees and costs.
When is an employer’s unlawful failure to pay owed wages a “knowing” violation of the Virginia Wage Payment Act?
Under the new statute, an employer acts knowingly if it has actual knowledge, deliberately ignores the truth, or recklessly disregards the truth. An employee does not have to prove that an employer specifically intended to have wrongly withheld wages to show a knowing violation.
How much time does an employee have to bring a claim for unpaid wages under the Virginia Wage Payment Act?
An employee must bring an action for unpaid wages within three years. In some cases, the filing period can be tolled while an employee pursues administrative remedies under the law.
Do employees have to exhaust their administrative remedies before suing for unpaid wages in court?
No. An employee is not required to exhaust administrative remedies before bringing an action in court. However, as noted above, administrative remedies are available, and an employee’s deadline to sue in court may be extended while the employee is pursuing a remedy through the administrative process.
Can employees join together in a lawsuit for unpaid wages under the Virginia Wage Payment Act?
Yes. The amended Virginia Wage Payment Act provides that employees may seek to redress wage theft individually, jointly, or in a collective action. Collective actions follow the same procedures as those provided for by the federal Fair Labor Standards Act.