Change in the Commonwealth: Reviewing Virginia’s Expansive New Employment Legislation Taking Effect Today

For months, Virginia employers have heard about the new wave of employee-friendly legislation that will create additional costs and challenges for Virginia employers.  Today, as Virginia enters Phase 3 of its reopening plan, that new era in Virginia begins.  As the deluge of new legislation impacting employers takes effect, we review some of the key legislative changes (in addition to those covered in our prior alert here) that should be top of mind for Virginia employers and what employers can and should do now, including compliance with immediate posting and notice requirements, to minimize the impact on their business operations and liabilities.

Expansion of the Virginia Human Rights Act:  Protected characteristics in Virginia include for the first time: veteran status, sexual orientation (actual or perceived), and gender identity.  However, along with that expansion of coverage came sweeping procedural changes that impact almost all claims - not just those based on the newly-protected characteristics - alleging violations of the Virginia Human Rights Act.  For employers, these procedural amendments represent a significant increase in the potential liability exposure under the VHRA. 

Previously, claims under the VHRA were limited to very small employers (generally less than 15 employees), for cases of wrongful discharge, with limited penalties.  This meant Virginia employers were almost exclusively litigating employment claims under federal law, in federal court.  Now, the expanded VHRA permits employees of employers with more than 15 employees to bring a private right of action seeking redress for an expanded category of employment actions and to recover uncapped compensatory damages, as well as punitive damages and attorney’s fees.  Employers should therefore expect to see employment discrimination claims brought in state court, the generally preferred venue for plaintiffs, which will make early dismissal and summary judgment more challenging under Virginia’s procedural rules.

Proactive employers should not only review employment policies to make sure that their language reflects the new protections, but also focus on training as a preventative measure to limit claims and, as a result, limit exposure under the new VHRA.

Pregnancy Non-Discrimination and Accommodation:  Although prohibitions on discrimination against pregnancy and pregnancy-related conditions are not new for Virginia employers, this legislation contains both posting and notice requirements and a more robust accommodations process that will have an immediate impact. 

Employers must post notice under the new law in a conspicuous place and in its employee handbook, as well as providing a copy of the notice to (1) new hires, (2) employees who disclose pregnancy within 10 days of the disclosure, and (3) all current employees within 120 days of the July 1st effective date of this law.  The notice must include information concerning (i) the prohibition against unlawful discrimination on the basis of pregnancy, childbirth, or related medical conditions and (ii) an employee's rights to reasonable accommodation for known limitations related to pregnancy, childbirth, or related medical conditions.

The law prohibits refusal to make “reasonable accommodation” related to pregnancy, childbirth or related medical conditions, absent undue hardship to the employer.  It defines reasonable accommodation to include more frequent or longer bathroom breaks, breaks to express breast milk, access to a private location other than a bathroom for the expression of breast milk, acquisition or modification of equipment or access to or modification of employee seating, a temporary transfer to a less strenuous or hazardous position, assistance with manual labor, job restructuring, a modified work schedule, light duty assignments, and leave to recover from childbirth.  Employers can and should consider these listed accommodations when engaging in the interactive process with employees, and ensure that these accommodations are included in their policies and notice under this law. 

Similar to many of the new laws taking effect, employees have a private right of action for violations of this provision.

Whistleblower Protections:  This new law vastly expands the scope of whistleblower protections in Virginia, by creating a statutory prohibition on retaliating against any employee who “in good faith” reports a violation of any federal or state law or regulation to a supervisor, governmental body or law-enforcement official.  The law also extends protection to those who participate in any investigation or refuse to engage in activity that would violate the law or regulation.  The law does not, however, authorize an employee to disclose data protected by law or privilege, or make any other disclosure that would violate federal or state law. 

This is a significant departure from prior whistleblower claims, pursued through a wrongful discharge tort and therefore restricted to employees who were terminated, as opposed to those claiming other forms of retaliation, such as discipline.  Additionally, the prior causes of action were limited to alleged violations of public policy set forth in Virginia statutes and therefore could not be based on whistleblower activity relating to federal laws or regulations.

Employees claiming violations of this law may now bring a private cause of action within one year of the event, and seek damages including reinstatement and/or compensation for lost wages and benefits, plus reasonable attorney’s fees. 

The immediate takeaway for employers is to ensure that supervisors are properly trained to understand that any internal complaints should be reported up and to understand that employees who refuse to follow instruction or perform aspects of their job, claiming that it violates any federal or state law or regulation, should not be discharged or disciplined without consulting with Human Resources to prevent inadvertent violations of this law.

Expanded Penalties for Virginia Wage Laws:  In addition to the wage and hour developments previously reported on, employers in Virginia will also be faced with increased penalties, including attorney’s fees and liquidated damages equal to any amount of wages due, in the event of a failure to timely or correctly pay wages as required by Va. Code. § 40.1-29.  The law also permits employees to bring a private right of action, individually or collectively, for failure to pay wages under this section, and provides for an award of treble damages for a “knowing” violation of this provision.

Additional Prohibitions:  Employers are now prohibited from entering into, enforcing or threatening to enforce a covenant not to compete with any “low-wage” employee or independent contractor.  For the purposes of this statute, “low-wage” is determined by a formula utilized by the Virginia Employment Commission to determine the average weekly wage in the state.  This number is calculated quarterly, and based on the most recent report is $1,204/week or $62,608 annually.  This new law applies to any agreement entered into or renewed after July 1, 2020.  Importantly, it does not prohibit non-disclosure agreements related to trade secrets.  All employers must all post a copy of the relevant law or a summary approved by the Department of Labor and Industry where other employee notices required by state or federal law are posted.

Employers may also not discharge or retaliate against employees who inquire about, discuss or disclose information about any other employee’s wages or compensation to another employee.  This protection does not extend to individuals who have access to compensation information as part of their essential job functions.  Unlike many other new pieces of legislation, this law does not carry a private right of action on its own, but rather, all complaints must be addressed to the DOLI.  Employers should revisit their policies and handbooks to ensure that any prohibition that would violate this new law is removed.

Employer Takeaways:  Both the number and scope of these legislative changes facing employers, particularly at a time when the focus of many businesses has been navigating the challenges of the COVID-19 pandemic, can be daunting.  However, employers should act now to comply with the new posting and notice requirements, as well as reviewing key employment policies, employment agreements, and independent contractor relationships to ensure compliance with these new laws and minimize the threat of future claims.  Looking forward, employers should strongly consider providing additional training, especially for supervisors and managers, on these new laws as a preventative measure to avoid being faced with significant future liability. 

If you have questions about any of the new Virginia legislation or would like further information, please contact the authors or your Seyfarth attorney.