Virginia Significantly Raises Worker Misclassification Fines

headerFrom Virginia Workplace Law —

“On July 1, 2014, the  Virginia Workers Compensation Act (the “VWCA”) significantly increased the civil penalties that the state can impose on a Virginia business owner who has failed to insure a worker who should have been insured.

The civil penalty is now up to $250 per day for each day of noncompliance, subject to a maximum penalty of $50,000, plus collection costs.”  The VWCA requires every business owner with more than two employees (a part-time worker is counted as one employee) to have coverage for such worker.

Business owners may forget to count subcontractors/independent contractors into their calculation. According to the Virginia Workers’ Compensation Commission, “If a business hires subcontractors to perform the same trade, business or occupation, or to fulfill a contract of the business, the subcontractor’s employees are included in determining the total number of employees …A business or contractor that hires subcontractors to assist in their work or fulfill a contract must count the subcontractor’s employees as well as their own when considering if they have more than two employees, if yes, the business /contractor is required to carry workers’  compensation coverage. This is true even if all subcontractors have their own coverage.””

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