In latest the Weekly Wright Report:
New Virginia Laws Usher in Big Changes for Contractors
On July 1, many new Virginia laws go into effect. Among these new statutes are key wage laws that affect general contractors in Virginia. We will take a look generally at what these news laws say and the implications for contractors. Then we will highlight some steps to keep in mind if you are potentially affected by these new laws.
First, Virginia will be keeping a close eye on the issue of worker misclassification in all areas across the Commonwealth. Virginia will now presume that all workers are employees of an entity unless that entity can show that said work is an independent contractor according standards set by the IRS. Therefore, the new “default” is that if someone works for you, he or she is your employee unless you can clearly show otherwise. A failure to properly classify your workers can result in serious consequences including private causes of action by the workers and debarment from public contracting.
Second, Virginia has amended its statute requiring employers to pay all employees wages due and owing, Virginia Code § 40.1-29. If an employer fails to pay an employee wages, the new amendments impose civil penalties of $1,000 for each violation. If an employer “willfully and with the intent to defraud” fails to pay wages, they are subject to criminal penalties – misdemeanor if less than $10,000 and a felony if greater. The new amendments allow affected employees to bring private suits against the employer, individually or collectively, to collect wages owed. The employee can recover twice the amount owed under these suits, and, if the employer “knowingly” failed to pay the employee, he or she can get three times the amount owed. Employees will be entitled to their attorneys’ fees for successful suits, which will incentive litigation amongst plaintiff lawyers in this area.
The big change (and real kicker) comes in new Virginia Code § 11-4.6. This is a new section that statutorily makes general contractors employers for their subcontractors’ employees, at all tiers. Therefore, the general contractor becomes “jointly and severally liable to pay any subcontractor’s employees.” These contractors are, therefore, exposed to liability under Virginia Code § 40.1-29 discussed above. This is no small change as it imposes potentially liability on down the contractual chain.
Luckily, there are limitations. First, this new statute only applies to general contractors on projects worth more than $500,000. Second, it does not apply to single family residential projects. Third, liability only attaches if the general contractor “knew or should have known” that the subcontractor at issue was not paying its employees. Finally, if a general contractor has to pay out, the subcontractor must indemnify the general contractor (unless the sub failed to pay employees because the GC failed to pay the sub).
So – what is a contractor to do? Step one should probably be to increase due diligence and really think about subs and suppliers that are brought on to a project. You are going to want to stick with subs you find trustworthy. Next, you can require all subs to have payment and performance bonds. Another option is to boost indemnity provisions in your subcontracts. A general contractor can require subs certify that their employees have been paid as a condition for payment on the contract.
Finally, give us a call to speak about the new laws and discuss your particular situation!
WCS Estates and Trusts Group Offers Safe Outdoor Signing
by Neil Lanzi
If restaurants can do it, so can the attorneys at Wright, Constable & Skeen, LLP. Instead of outdoor dining however, outdoor signing is now being offered to WCS clients who wish to complete their estate planning and execute their documents in a private and safe environment. The estates and trusts attorneys at WCS have determined the virtual witnessing and notarization process approved by the State of Maryland during the pandemic is simply too cumbersome for both clients and attorneys. The nicer weather and proliferation of outdoor dining spawned the idea of an outdoor signing process. Each of the attorneys in the Estates and Trusts Group has their own procedures but generally here is how it will work.
First, a client questionnaire is typically sent to the clients after which a phone or Zoom meeting is held between the attorney and the clients to review the goals and wishes of the clients. Initial drafts are then prepared and sent to the clients followed by either a phone or Zoom meeting to review the proposed documents, which typically include a Last Will and Testament, Medical Power of Attorney, Maryland Statutory General Power of Attorney, Advance Medical Directive and any Trust Documents determined to be necessary. Next, once all agree the documents are in final form, a final phone/Zoom meeting is held to make sure the documents to be signed are understood and in accord with the client’s wishes.
Finally, an appointment is scheduled for the clients to meet with counsel and at least one staff member for the execution of the estate planning documents. The actual meeting takes place on the first floor patio located on the west side of the firm’s Towson Office located at 102 West Pennsylvania Avenue. The patio area is private and contains two tables under an overhang that will provide protection in the event of inclement weather. Clients are asked to wear masks and to bring their own blue pens. Once all are gathered on the patio, safely distanced, the clients are provided the documents on a clipboard and asked to sign where indicated. Once completed, the clients step away from the table and counsel and staff step forward to witness and notarize the documents. The clients may then leave and counsel and staff go back in the building where copies are made. A complete set of the documents is then mailed to the clients.
The attorneys at WCS are happy to help their clients achieve their estate planning goals while keeping everyone safe in the process.
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