Virginia Construction Industry

          Virginia has been trying to address employee classification in the federation, particularly in the construction industry. In a 2014 Executive Order, the Governor raised concerns that contractors who classify employees as “independent contractors” were depriving the Commonwealth of taxes and contradicting worker’s insurance coverage and many other benefits. By dodging costs, such contractors gained an aggressive advantage over contractors who acquiesced with the laws. The Inter-Agency Task force on Worker Classifications and Payroll Fraud was created by the Executive Order to withstand the problem.

       Recently, the Virginia passed legislation effective July 1, 2017 that would clearly make a general contractor responsible for any fines or other penalties based on a subcontractor’s failure to obtain or maintain the required contractor’s license.

        It is evident that the Commonwealth of Virginia will continue to combat construction contractors who try to cheat the employees as independent contractors. The punishment for violating these statutes are significant and can result in loss of the contractor’s own license. Virginia’s accelerating enforcement and the severe consequences for worker classifications, it is important that general contractors confirm all their subcontractors are properly licensed and maintain copies of the licenses at the project site.