We continue to see the independent contractor classification under attack. Recently, the Virginia Department of Labor and Industry issued a new policy making construction employers responsible to furnish upon demand proof that its subcontractor have the required licenses. The Virginia Occupational Safety and Health Compliance (VOSH) inspectors will enforce this new policy during periodic inspections.
Noncompliance with this classification can result in punishments from multiple agencies. First, the VOSH inspector can issue a citation, which can result in fines against the employer of up to $7,000.00 per worker. Failing to remedy the violation can result in an additional $7,000.00 fine per violation, per day.
Second, the VOSH inspector can refer both the employer and the workers to the Department of Professional and Occupational Regulation (DPOR) who can assess an unlicensed subcontractor a $500.00 fine for each day that he worked on the job site. The subcontractor can also be charged with a Class 1 Misdemeanor, which can carry a penalty of up to 12-months in jail and an additional $2,500.00 fine. The contractor and subcontractors can also have their licenses revoked if they fail to remedy the license violations.
Finally, a noncompliant employer can be referred to the Virginia Employment Commission (VEC) and/or the Virginia Workers’ Compensation Commission (VWCC) for audits of its employment practices. Negative findings can be punished as criminal offenses and are classified as Class 1 Misdemeanors carrying the same penalty described above.
All subcontractors must have contractor licenses. If the employer fails to provide proof of such licensure to a VOSH inspector, there can be significant and multiple consequences. It is likely, similar requirements will be demanded in other states. Accordingly, each flooring dealer and contractor should have its legal counsel review its document program to determine its obligations and to ensure it has the required proof of its subcontractors’ licenses.
Notice: The purpose of this blog is to review the latest developments that are of interest to clients of Mr. King. The information contained is abridged from legislation, court decisions, and administrative rulings and should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.
