Virginia’s Misclassification Anti-Retaliation Law, Va. Code § 40.1-33.1 (“MARL,” titled “Retaliatory actions prohibited; civil penalty”), provides that employers shall not discharge, penalize, or take any retaliatory action against an employee or independent contractor for reporting, or planning to report, to an appropriate authority an employer’s failure to properly classify an individual as an employee and failure to pay required benefits or other contributions.
The MARL is important because it prohibits employers from retaliating against employees or independent contractors for reporting possible independent contractor misclassification to appropriate authorities.
Prohibition on Retaliation for Reporting Misclassification
The MARL contains a broad prohibition on employers taking retaliatory actions against employees or independent contractors who engage in either of two “protected activities.” First, the employer cannot retaliate against an individual for reporting or planning to report to appropriate authorities the employer’s failure to properly classify an individual as an employee. Second, the employer cannot retaliate against an individual for being requested or subpoenaed by an appropriate authority to participate in an investigation, hearing, or inquiry by an appropriate authority or in a court action:
A. An employer shall not discharge, discipline, threaten, discriminate against, or penalize an employee or independent contractor, or take other retaliatory action regarding an employee or independent contractor’s compensation, terms, conditions, location, or privileges of employment, because the employee or independent contractor:
1. Has reported or plans to report to an appropriate authority that an employer, or any officer or agent of the employer, has failed to properly classify an individual as an employee and failed to pay required benefits or other contributions; or
2. Is requested or subpoenaed by an appropriate authority to participate in an investigation, hearing, or inquiry by an appropriate authority or in a court action.
Good Faith and Reasonable Belief
Importantly, the MARL provides that its anti-retaliation protections only apply if the employee or independent contractor who discloses information about suspected worker misclassification has done so in good faith and upon a reasonable belief that the information is accurate:
B. The provisions of subsection A shall apply only if an employee or independent contractor who discloses information about suspected worker misclassification has done so in good faith and upon a reasonable belief that the information is accurate. Disclosures that are reckless or the employee knew or should have known were false, confidential by law, or malicious shall not be deemed good faith reports and shall not be subject to the protections provided by subsection A.
Administrative Process
The MARL provides an administrative process for individuals who experience retaliation in violation of its provisions. Under this process, an individual who experiences retaliation in violation of MARL may file a complaint with the Commissioner of Labor and Industry. See Va. Code § 40.1-2 (defining “Commissioner” as meaning the Commissioner of Labor and Industry.) The Commission, with the employee’s signed consent, may then institute proceedings against the employer to recover appropriate remedies, including reinstatement and lost wages:
C. Any employee who is discharged, disciplined, threatened, discriminated against, or penalized in a manner prohibited by this section may file a complaint with the Commissioner. The Commissioner, with the written and signed consent of such an employee, may institute proceedings against the employer for appropriate remedies for such action, including reinstatement of the employee and recovering lost wages.
Civil Penalty
Finally, the MARL further provides that an employer that violates its provisions will be subject to a civil penalty in an amount up to the amount of lost wages resulting from the violation:
D. Any employer who discharges, disciplines, threatens, discriminates against, or penalizes an employee in a manner prohibited by this section shall be subject to a civil penalty not to exceed the amount of the employee’s wages that are lost as a result of the violation. Civil penalties under this section shall be assessed by the Commissioner and paid to the Literary Fund.
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