Header graphic for print

Virginia OSHA Law News

Insighta on Health & Safety Law and Enforcement in Virginia

2016 — Focus on Construction Safety

Posted in Citations, Employment & Labor Law, Recordkeeping/Reporting, Training, Uncategorized, Virginia OSHA

Bigstock-Brick-Broken-on-hardhat-3646790The recent “constructor” magazine issued by the Associated General Contractors has provided in a feature article a useful reminder to those in the construction industry about the importance of focusing on worker safety.

I’d recommend the article as a concise, useful read to any of you.  There are some themes that emerge that are worth emphasizing:

  • Hiring temporary employees and bringing on new employees is a prime time for problems.  Ensuring that these workers do not fall through the cracks, are given the attention and training they need, and are given regular consultation and attention as they work their way into their jobs is important.  We have seen numerous cases in both the construction and in general industry with serious injuries to temporary and new workers because they are moved forward with work before fully understanding how to do it safely.
  • But don’t forget about employees after the initial orientation and testing.  Construction companies with successful safety records are making safety part of the culture.  Regular meetings that promote safety in an educational and interesting manner do help.  As the article suggests, including these as part of a monthly lunch meeting can be a way to reach employees, and having peers — not just supervisors — lead the discussion can be more meaningful.
  • Lessons learned can be valuable teaching tools.  As the article suggests, learning from real-life accidents and incidents can be helpful.
  • Don’t forget about the potential language barriers involved in training.  OSHA is paying close attention to the ability of employers to convey safety training and concepts to those whose first-language is not English.  That, plus the better safety results, are good reasons to focus on removing this barrier.
  • Lastly, the article focuses on some very practical on-the-job ways to keep safety understandable and accessible.  These include:  developing “pocket safety guides” for particular tasks assigned, establishing “craft-specific safety mentoring” program, providing badges that show the level of safety training of each employee, and providing “Stop Work” cards that employees can issue if they see safety hazards.

Construction law is full of cases, citations, injuries, and disputes (related to OSHA, insurance, indemnity, and much more) where the root cause of the problem is an accident on the construction site.  The new year provides a chance to focus on safety.  Beyond these tips, focusing on the provisions of your safety program, focusing on the contract provisions in the construction agreements you issue and sign, and examining your company’s safety and training culture can provide benefits to workers and the company in the long run.

Don’t Get Snowed in by New DOL Pay Transparency Regulations

Posted in Employment & Labor Law, Enforcement, Multi-Employer Issues, Standards and Regs

Our guest authors are Brad Tobias and Lindsey Coley.IMG_20140213_130120_129

Like the roads in our region affected by the recent Winter Storm Jonas, the avenue of compliance for federal contractors has just become a little more treacherous. The Department of Labor’s Final Rule affecting federal government contractors’ policies on pay transparency went into effect on January 11, 2016. [1] The Rule, which implements Executive Order 13665, which was signed by President Barack Obama back in April 2014, is the DOL’s effort to promote pay transparency by barring policies of certain federal contractors which previously prevented workers from discussing their wages. Now, covered federal contractors are prohibited from firing or otherwise disciplining employees or job applicants for discussing their pay or the pay of their co-workers.  This new Rule, unlike the National Labor Relations Act, applies to all employees and applicants, including supervisors and managers.[2]

This new Rule has several parts, and this article will explain what steps covered federal contractors will need to take in order to comply with this Rule and avoid potential audits, fines, or debarment. This Rule applies to employees and applicants of federal contractors or subcontractors that have contracts over $10,000 that are entered into or modified after January 11, 2016.

What the Rule prohibits

Employees and applicants of federal contractors now have a protected right to inquire about, discuss or disclose their own compensation or the compensation of other employees. If contractors discipline, harass, demote, terminate, deny employment or otherwise discriminate against employees or applicants for these discussions, then they open themselves up to investigations by the Office of Federal Contract Compliance Programs (“OFCCP”) and penalties. However, the Rule does not impose any requirement on covered contractors  to disclose information to applicants or employees regarding the compensation paid to other employees, even if employees request such information.

It is important to note that the term “compensation” is very broadly defined.  For purposes of this Rule, “compensation” includes any payments made to an employee or offered to an applicant, including but not limited to salary, wages, overtime pay, shift differentials, bonuses, commissions, vacation and holiday pay, allowances, insurance and other benefits, stock options and awards, profit sharing and retirement.

If contractors violate this Rule and dismiss the employee/applicant, then they may be required to reinstate or hire the employee or applicant, and to compensate the individual for back pay, front pay, a pay raise, or some combination of these remedies.  Compensatory and punitive damages are not available in enforcement actions under the Rule.

How to Stay Compliant

  1. Update Handbooks & Policies

The Rule requires that affected contractors incorporate the non-discrimination provision into their employee handbooks and disseminate the non-discrimination provision to employees and job applicants.  We recommend that handbooks be revised and updated, and that the non-discrimination provision be posted on the company’s website if individuals can submit an employment application online.

  1. Update Subcontracts and Purchase Orders

Covered contractors are responsible to ensure their subcontractors comply.  If your subcontracts and purchase orders include the full language of the EEO clause, instead of incorporating it by reference, contractors will need to update the language in their documents to reflect the new pay transparency rules.

  1. Posting the New DOL Notices in the Workplace

Contractors must post the new pay transparency non-discrimination notice in the workplace. Contractors are now governed by three posting requirements under OFCCP regulations. These include posting:

  • An “EEOC is the law” poster
  • An “EEO is the law” poster supplement
  • The new nondiscrimination notice on pay transparency.

Each of these posters is available online on the OFCCP website.

Employer Defenses

When facing an audit or investigation, in addition to demonstrating that the decision to discipline the employee was for an unrelated, legitimate reason, the OFCCP recognizes two specific, but limited defenses when defending against claims for violations of the new pay transparency rule. The two defenses are: (a) the “essential job functions” defense which applies in the HR/Finance/Audit/IT personnel and (b)  the “workplace rule” defense, which applies when the employer can show a different reason for the adverse action.

  1. The Essential Job Functions Defense

Under the “essential job functions” defense, a contractor can defend against a claim of discrimination by showing that it took adverse action against an employee because the employee (a) had access to the compensation information of other employees or applicants as part of his or her essential job duties and (b) disclosed such information to individuals who did not otherwise have access to it. The term “essential job functions” means the fundamental job duties of the employment position an individual holds. A job function may be considered essential if (i) the access to compensation information is necessary in order to perform that function or another routinely assigned business task; or (ii) the function or duties of the position include protecting and maintaining the privacy of employee personnel records, including compensation information. The DOL has provided an example of how the defense works:

Sam is an information technology professional at a federal contractor and one of his weekly tasks is to ensure that personnel data, including individualized pay data, has not been compromised. While performing a routine security check, Sam notices that his coworker Sally makes $10,000 less a year than Ted, a colleague who does the same job as Sally. The next day, Sam informs Sally of Ted’s pay. In this example, the contractor could defend an adverse action against Sam because he revealed pay information that he discovered performing one of his essential job functions. Access to employees’ compensation data is necessary to perform one of Sam’s routinely assigned tasks. Additionally, Sam’s task involved protecting the privacy of personnel information.

  1. The “Workplace Rule” Defense

The “workplace rule” defense allows for a contractor to defend against a discrimination claim by showing that it took adverse action against an employee for violating a consistently and uniformly applied workplace rule that does not prohibit employees or applicants from discussing or disclosing their compensation. That is to say, employers are not liable if they take adverse action against employees or applicants who are discussing pay while they are simultaneously violating another workplace rule. The DOL provided an example of when this defense might apply:

ABC Corporation, Inc. allows employees to take a 20-minute break for every three hours worked. Jennifer and Sally take a 30-minute break during which they discuss their pay. Their manager refuses to pay both Jennifer and Sally for the extra 10 minutes taken during their break, which is the usual penalty for exceeding the allotted 20-minute break time. In this example, the contractor can defend an allegation that it unlawfully penalized Jennifer and Sally for discussing pay by explaining that Jennifer and Sally were penalized for violating the consistently and uniformly applied workplace rule that employees lose pay if they take a break longer than 20 minutes.

Recommendations and Conclusion

Covered federal contractors and subcontractors are strongly encouraged to update their handbooks, policies, practices and guidelines to be sure that they comply with this new Rule.   Policies must not expressly prohibit discussion of compensation, nor  contain language that will be construed as “tending to prohibit” or discourage applicants or employees from discussing compensation.

Additionally, though the Rule does not impose any explicit training requirements, federal contractors and subcontractors should train managers and supervisors on these new rules to ensure they do not take potentially discriminatory actions against applicants or employees who discuss compensation information. In this regard, separate and apart of this new OFCCP Rule, Section 7 of the National Labor Relations Act (“NLRA”)  already protects nonsupervisory employees who engage in concerted activity by discussing compensation issues with co-workers. This NLRA provision applies even in the non-union setting.  Accordingly,  employers who violate this new OFCCP Rule should also expect unfair labor practice charges to be filed if employees are disciplined.

Last, employers must appropriately document the reasons for disciplinary action, especially termination decisions.  Whenever an employee has engaged in some form of “protected activity,” which now includes discussing compensation, in close proximity in time to the decision to discipline, the employee is going to claim retaliation. This puts a premium on making sure the reasons for disciplinary action are understood and documented at the time.

If you have questions about these issues, contact any of the attorneys who are part of our Employment team.

[1] The final rule is entitled “Government Contractors, Prohibitions Against Pay Secrecy Policies and Actions” and can be found here.

[2]  Compared to Section 7of the National Labor Relations Act (“NLRA”), which protects the rights of only non-supervisory employees to engage in certain protected concerted activity, this Rule provides broad protections to all employees who discuss their pay, including for both non-supervisory and supervisory-level personnel.


Delay in Filing Suit as a Defense to Va. OSHA Citation

Posted in Citations, Enforcement


Defense Succeeds in Davenport vs. C.R. Meyer & Sons Case in Isle of bigstock-Labor-law-hardhat-gavel-44984644Wight County Circuit  Court

Over the years, we have encountered a few clients who have received citations from VOSH and, after contesting them, nothing happened for quite a while — months if not years.  In a couple of instances, VOSH proceeded then to file suit to enforce the citation and penalties in Circuit Court.  With mixed results, we have challenged those suits based upon the delay in VOSH having filed suit — a statute of limitations defense, in effect, based upon language in Virginia’s OSHA enforcement statutes.  In most basic terms, there is authority for the position that VOSH needs to file suit within two years.

Since those challenges several years back, VOSH has, for the most part, been timely in filing suit in any cases where an employer has challenged the citation and penalty.  Recently, an employer in Isle of Wight County challenged VOSH’s filing of a suit more than two years after the citation and the notice of contest.  Thanks to our friend, Mark Nanavati, one of the defense attorneys involved for sharing the successful outcome to that challenge with us.

In this recent case, here are some of the facts on which the Court based its decision to dismiss the suit, and thus the citation, against the employer:

  • A workplace accident occurred on October 5, 2012.  VOSH conducted an inspection.
  • On April 1, 2013, VOSH issued a citation and penalties to the employer.
  • On April 15, 2013, the employer sent a notice of contest to VOSH challenging the citation and penalties.
  • More than two years later, on May 22, 2015, VOSH filed a Complaint in the Isle of Wight Circuit Court to enforce the citation and penalties.

Relying upon some previous circuit court decisions, the judge in Isle of Wight determined that there is NOT a two year statute of limitations on VOSH filing suit, but that, if the employer could demonstrate prejudice from the delay, the protracted timing could be an issue.  The judge also stated that there is not inherent (or automatic) prejudice from the greater-than-two-year delay.

At the hearing, the employer presented evidence from representatives of the employer, a construction company, about the prejudice that the delay in the enforcement of the citation had enacted upon the company.  The judge’s opinion letter recounts the following as the resulting problems from the delay:

  • Negative impact on internet-based review sites used by customers to evaluate the company and its competitors, based upon the existence of the OSHA citation.
  • Lost work that it had bid for existing customers for whom it often has done work (though it could not say that was the exact reason for not getting the work).
  • Direct communication from an existing customer that the employer needed to take action to correct its negative rating.
  • The existence of the citation and the delay in enforcement had made it difficult to address these issues with customers and prospects, and to conduct business planning for the future.
  • Many employees of the company and another company working on the site and involved in the accident were no longer working in the area and were no longer available to testify.
  • The site had been an active construction site and the completion of the project made it functionally difficult to investigate or defend against the citation.

According to the opinion letter, VOSH did not present any witnesses in opposition, and stated that the delay resulted from issues with “manpower and caseload.”

Based upon this testimony, the Court concluded that the employer had met its burden of presenting “credible evidence” of “actual prejudice” resulting from the delay in filing suit.  The Court also concluded that the explanation from VOSH was not reasonable to excuse the delay.  As such, the Court dismissed the Complaint and the citation.

These types of challenges stem from the language in Va. Code Section 40.1-49.4 and whether VOSH has to “immediately” file suit or not. Some courts have been more willing to view the typical two-year statute of limitations for personal injury cases to apply to this situation. Most courts are likely to view that any delay must be evaluated based upon any prejudice that results. With that said, however, the prejudice presented in the Isle of Wight case does not appear extreme. In fact, some of it appears to be theoretical prejudice and not necessarily a direct result from the delay.

The lesson here is — if there is a delay of two years or more from the notice of contest to the filing, then a defense based upon this delay should be considered. During the interim, records should be kept of any actual prejudice that results from the delay. And, as seen in this case, any prejudice that might have resulted from the delay should be catalogued as well.


Alert: OSHA Penalties Could Increase in 2016

Posted in Citations, Enforcement

bigstock-Safety-First-Warning-Sign-40404316Word is starting to spread about the potential increases — up to 80% — for OSHA penalties based upon recent federal government budget legislation.  We will work on keeping an eye on how these increases impact Virginia’s enforcement of the OSH Act.  For now, here is a helpful summary of some of the potential monetary impacts for the various levels of citations, and some perspective from the construction industry.

The short version is that all penalties at a maximum of $7000 could increase to a maximum of $12,500.  Those maxed out at $70,000 could increase to $125,000.

It has been many years since increases in the penalty levels have occurred, and there have been threats of increases a number of times during that period.  It looks like they will become a reality soon.

Update on VOSH Inspections of Contractor’s Licenses

Posted in Employment & Labor Law, Enforcement, Inspections

Construction workerOn July 28th, we provided an outline of the new Department of Labor and Industry policy that would have DOLI inspectors from its occupational safety and health division (VOSH) checking on contractors’ licenses on the inspected construction site, and on the “independent” status of those working on the sites.  The latter issue focuses on whether the workers are independent contractors or should be treated as employees of those above them in the chain of contracting.

Since then, there has been a lot of discussion and activity related to the policy and its application.  And, we can report, there have been referrals by VOSH to the Department of Professional and Occupational Regulation (DPOR) and likely other state agencies as a result.  Though the fines that we have seen thus far are not large, there is certainly an opportunity for them to be.

The number one question that we have gotten on this is “whether the general contractor on a project needs to collect the contractors’ licenses for all working on the project, or just for its immediate subcontractors.”  Thus far, our answer has been that it is best to collect them all and have them — in paper form or electronically — in the job trailer and prepared should an inspection occur.  Of course, the general contractor can be cited by DPOR if it is contracting with an unlicensed subcontractor, so it is extremely good practice to have those in hand and to confirm that they are current.

Likely, the issues related to the independent contractor vs. employee issues are going to be more complicated than the licensing issues, but we expect we will begin seeing those issues show up as well.  Primarily, these issues can arise where trade subcontractors hire-on labor forces to perform work, and how they should be treated.  If you are in that situation, give it advance thought and be prepared.

The application of this new policy has begun, and will continue to evolve.  We’ll try to update as we learn more.

Handling a Workplace Accident

Posted in Employment & Labor Law, Recordkeeping/Reporting, Standards and Regs, Virginia OSHA

Our guest author is Peter G. Irot, a partner in Gentry Locke’s insurance group. Irot-1200x1200

Workplace accidents can be a frightening prospect for a business. You may have made your workplace as safe as possible, your employees may be highly trained, and you may have all the right insurance. But accidents happen.

Workplace accidents will affect your employees and your business, whether through lost time, payments for medical care, or the simple human stress reaction that affects everyone – management as well as labor – involved with an accident. Moreover, there are a number of statutory and contractual requirements arising out of workplace accidents with which businesses must immediately comply.

In short, handling a workplace accident means both protecting your employees and protecting your business. Thus, it pays to be prepared to swiftly handle such accidents by taking immediate action to make sure both your employees and your business fully recover.

First Steps: protecting your employees

As soon as you learn of an accident, your first actions must be to take care of your injured employee. Evaluate the scene, provide initial comfort and assistance (training yourself and your employees in CPR is recommended for situations like this), and call 911 if necessary. Something that businesses often forget after the initial rush of assisting injured employees is making sure other employees are safe and provided for. If they were witnesses to the accident, depending on its severity, they may need comfort and counseling of their own.

Even if 911 is not necessary, the injured employee may still require medical attention quickly. Your workers’ compensation insurance carrier should have already provided you with a list of three or more physicians to offer injured employees. (This satisfies the employer’s initial duty under Virginia Code § 65.2-603(A)(1) to provide the employee with a “panel of physicians.) The employee should pick one of the physicians offered.

If your carrier has not provided you with such a list, contact your carrier and obtain one. If, under your workers’ compensation insurance policy, you are responsible for procuring your own panel of physicians – possibly due to a large self-insured retention or a high deductible – the workers’ compensation professionals at Gentry Locke can assist you with compiling the best physician panel for your business. Keep in mind that it is often advisable to provide initial transportation to the panel doctor chosen by the injured employee.

 Second steps: legal and insurance requirements (protecting your business)

After the initial rush of responding to an accident and protecting employees, businesses must still contend with an avalanche of legal requirements. Some of these requirements come from the Virginia Workers’ Compensation Act while others are likely contained in your business’s workers’ compensation insurance policy.

As for the Act’s requirements for employers, it is likely that under your policy, your insurance carrier will comply with the Act on your behalf. Some requirements imposed by the Act include payment for medical treatment for the injured employee, filing a “First Report of Injury” with the Virginia Workers’ Compensation Commission, providing vocational rehabilitation services to the employee, and even making periodic workers’ compensation payments in lieu of salary. (Please keep in mind that this is nowhere near an exhaustive list of the Act’s requirements for employers.)

However, every insurance policy is different, and yours should be read and analyzed to understand what duties you have with regard to your insurance provider. Gentry Locke’s workers’ compensation lawyers can also assist you with this question. Regardless, it is almost certain that your business must: 1) report the accident to your carrier at your earliest possible opportunity; 2) cooperate with your carrier’s investigation of the accident; and 3) work with the defense attorneys hired by your carrier, if some aspect of the compensability of the accident is disputed.

Finally, an aspect of workplace accidents too often overlooked by business owners is the potential for OSHA investigations and fines. As far as government regulators are concerned, workplace accidents and OSHA investigations go together like peanut butter and jelly. Fortunately, Gentry Locke’s OSHA & Workplace Safety team stands ready to assist your business with the thorny issues of handling OSHA investigations and helping to prevent or lower fines.

Update: Compliance with New VOSH Policy on Worker Misclassification and Contractor Licensing

Posted in Citations, Employment & Labor Law, Enforcement, Inspections

The Virginia Department of Labor and Industry (DOLI) regulates the workplace through its Occupational Safety and Health (VOSH) Program. On July 1, 2015, DOLI began implementing a new VOSH Policy to combat misclassification of workers.

Misclassification occurs when an employer improperly classifies a worker as an independent contractor who should in fact be an employee.

Employers in the construction industry – already heavily regulated by VOSH – should expect the policy to have significant implications for them. VOSH inspections are no longer just about health and safety violations in the traditional sense. Now inspectors are on the lookout for worker misclassification issues and making sure contractors and subcontractors are properly licensed.

What follows is an overview of the objectives, procedures, and penalties associated with the new VOSH Policy preventing worker misclassification – as well as strategies for coming into compliance.  

I.  VOSH Policy Objectives

The new VOSH Policy follows an Executive Order by Governor Terry McAuliffe establishing an inter-agency taskforce to examine the issue of worker misclassification and payroll fraud. As stated in a June 2, 2015 Public Service Announcement, the new VOSH Policy represents DOLI’s commitment to “aggressively pursue” Governor McAuliffe’s initiative to “root out the destructive practice of misclassification of workers in Virginia.”

How is misclassification of workers “destructive”? Misclassification itself is not illegal, but it can result in payroll fraud, reduced workers’ compensation and unemployment insurance protections, and violations of the tax code and other laws designed to protect workers.[1]

Most misclassification is thought to be intentional. DOLI estimates that employers can improperly avoid payroll taxes up to 40% by misclassifying employees as independent contractors.

In the construction industry, misclassification is considered “destructive” to the bid process. In a June 2, 2015 Memorandum to VOSH Staffers, DOLI advised that the new policy is intended to “level the playing field” between employers who currently provide all legal protections for their workers against those who misclassify: “Employers who misclassify can undercut the bids of those honest contractors who follow the law. Assuring that all employers are playing by the same rules when it comes to classifying employees will help to assure that the construction bid process is fair for all and improve safety and health and other legal protections for workers.”

As discussed below, the new VOSH Policy requires contractors to provide proof of their DPOR contractor’s license, as well as proof that their subcontractors are also DPOR-licensed. If VOSH determines that a construction employer has contracted with an unlicensed subcontractor, VOSH will refer both parties to the DPOR for possible sanctions. Doing business with an unlicensed subcontractor raises a red flag. It signals a willingness to cut corners on the job site – whether in misclassifying workers to avoid costs, or in providing a safe and healthy work place.

VOSH is undertaking an outreach program to explain the new policy to employers and employees. Brochures, posters, PowerPoint presentations, and other educational materials are available at a new misclassification page on DOLI’s website.[2]  

II.  VOSH Policy Overview

Whenever VOSH has “reasonable cause” to believe that worker misclassification has occurred, the following procedures will apply: 

  • No leniency for small employers or “good faith.” If VOSH proposes citations and penalties for the employer, it will not afford penalty reductions based on the size or good faith of the employer.
  • Proof of licensure. On construction multi-employer worksites, VOSH will require each contractor (e.g. general contractors, prime subcontractors, and lower-tier subcontractors) to provide proof of its DPOR contractor’s license as well as proof that its subcontractors are also licensed by DPOR.
  • DPOR Referral. If it is determined that a construction employer has contracted with an unlicensed subcontractor, VOSH will make a written referral to the DPOR for possible sanctions against both the contractor and its unlicensed subcontractor. DPOR sanctions may include fines, probationary terms, license suspension, or license revocation.
  • VEC / VWCC Audits. In misclassification cases where the contract’s value for the specific subcontractor’s job is less than $1,000 (and, therefore, the subcontractor is not required to hold a DPOR license), VOSH will make a written referral to the Virginia Employment Commission (VEC) and/or the Virginia Workers’ Compensation Commission (VWCC) for potential audits of the alleged employer’s employment practices. In some cases, VOSH may make such referrals for cases involving contract values of $1,000 or more.
  • Computerized Tracking – retroactive to January 1, 2015. VOSH is now tracking misclassification issues in its OSHA Information System (OIS) through the use of the State Strategic Initiative Program (SSIP) Code “Misclassification.”
    • Regional Directors and Certified Safety & Health Officials (CSHOs) must now indicate on all inspections and unprogrammed activities whether the issue of misclassification has arisen during the inspection or investigation.
    • Regional Directors and CSHOs must also review all cases opened since January 1, 2015. Where they have “reasonable cause” to believe that misclassification may have occurred, they must update the OIS by selecting the SSIP Code “Misclassification.”
    • The “Misclassification” Code must be entered for both the employer and the purported independent contractor.

                    Source: June 2, 2015 Memorandum from DOLI to VOSH.

III.  Compliance Strategies

Because the VOSH Policy is new, the details of how DOLI, VOSH, and the DPOR will enforce it in practice are not yet clear. The “reasonable cause” threshold is likely to be relatively low, given DOLI’s stated commitment to aggressively pursue “destructive” misclassification issues.

To avoid the potential penalties listed above, employers in the construction industry should consider the following strategies:

  • Review all independent contractor arrangements for compliance with the VOSH Policy.
    • Words not determinative. A written agreement is not sufficient to determine a worker’s status. Even though a contract refers to “independent contractors,” the practical and economic realities may say otherwise.
    • For each arrangement, reconsider the question, “Is that worker an employee or an independent contractor?”
      • VOSH considers the following factors in making this determination:
        • Factor 1: Who has responsibility to control the workers?
          • Employees must comply with instructions on how, when, and where to work.
          • Independent Contractors are hired to provide goods or services and usually do not receive detailed instructions from the hiring party
        • Factor 2: Does the alleged employer have the power to control the workers?
          • The hiring party’s right to insist on a particular sequence of work, and not just the end result, usually indicates an employer-employee relationship
        • Factor 3: Who pays the worker’s wages?
          • If the hiring party pays wages, likely an employer-employee relationship.
          • If the hired party can hire and pay assistants without the employer’s consent, likely an independent contractor relationship.
        • Factor 4: Whom do the workers consider their employer?
          • VOSH takes into account the workers’ subjective beliefs, although this factor is by no means determinative if the practical and economic realities show otherwise.
        • Factor 5: Does the alleged employer have power to hire, fire, or modify the workers’ employment conditions?
          • The hiring party’s right to assign additional work indicates an employer-employee relationship.
          • An independent contractor typically agrees to provide specific services, and is free to accept or decline additional jobs.
        • Factor 6: Does the ability of the workers to increase their income depend on efficiency rather than on initiative, judgment, or foresight?
          • If pay is based on efficiency, more likely an employer-employee relationship.
          • If pay is based on initiative, judgment, or foresight, more likely an independent contractor relationship.
        • Factor 7: How are the worker’s wages established?
          • Payment by the hour, week, or month generally points to an employer-employee relationship.
          • Payment by the job generally indicates that the worker is an independent contractor. Independent contractors typically cover all expenses not specified in the contract, and bear the risk of suffering financial loss in providing the services.

Source: VOSH Field Operations Manual. See also Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318 (1992) (applying similar 12-factor test)

  • The most important of these factors are responsibility and power to control the worker. Generally, a worker is an employee if the hiring party can control both what will be done and how it will be done. A worker is an independent contractor if he is not subject to the employer’s control about how to perform service.
  • Again, VOSH inspectors will not rely solely upon labels but will look at the practical and economic realities of the situation.
  • Contractors should ensure that their subcontractors possess the required contractor’s license issued by DPOR.
    • Require potential subcontractors to furnish a copy of their DPOR licenses during the bid process. State this requirement in the request for bids.
    • Require subcontractors to furnish a copy of their DPOR licenses again at the time of executing the subcontract. State this requirement in the subcontract.
    • Require subcontractors to ensure that their subcontractors (i.e., sub-subcontractors) are DPOR-licensed as necessary (i.e., contracts valued at $1,000 or more) and in the correct specialty. State this requirement in the subcontract.
    • Maintain copies of all DPOR licenses in a central location – electronically and in hard copy. If possible, maintain at the job site in the event of a VOSH inspection.
  • Subcontractors should ensure their DPOR licenses are for their precise classification or specialty for the scope of work performed.
    • DPOR contractor licenses consist of two parts: (1) the class of license (A, B, or C), which determines the monetary value of the contracts/projects that may be performed; and (2) the classification/specialty, which determines the type of work allowed.
      • Classifications/specialties: asbestos; blast/explosive; building; electrical; elevator/escalator; fire sprinkler; gas fitting; HVAC; lead abatement; liquified petroleum gas; manufactured home contracting; natural gas fitting provider; plumbing; radon mitigation; sewage disposal system; and water/well pump
    • Make sure DPOR licenses match the scope of work performed.
  • January 1, 2015 look-back. Under the new policy, Regional Directors and CSHOs are to review all cases opened since January 1, 2015 where they have “reasonable cause” to believe that a misclassification may have occurred, and to update OSHA’s Information System (OIS). Again, all it takes is “reasonable cause” for VOSH to assign the SSIP Code “Misclassification.” Red flags include contracting with unlicensed subcontractors, and exerting significant control over workers but calling them independent contractors. ; and regular intervals but calling them independent contractors

IV.  Conclusion

Virginia is undoubtedly cracking down on worker misclassification and contractor licensure issues. DOLI has identified that worker misclassification undermines businesses that follow the law, costs Virginia millions of dollars in tax revenues, and denies workers legal protections and benefits.

The new VOSH Policy has significant implications for the construction industry. Contractors should review all independent contractor arrangements for compliance with the VOSH Policy. Using the seven-factor VOSH test, contractors should reconsider the question, “Is that worker an employee or an independent contractor?” Contractors should ensure that their subcontractors possess the required licenses issued by DPOR. Contractors and subcontractors alike should evaluate whether the DPOR licenses are for the precise classification/specialty for the scope of work performed. Maintaining proper licensure, and furnishing proof thereof, should be written contractual obligations.

VOSH is tracking misclassification issues on its OIS computer database with a new “Misclassification” code. All it takes is “reasonable cause” for VOSH to assign a “Misclassification” code. VOSH inspectors are looking back at all cases opened since January 1, 2015 to determine whether to assign this code.

Gentry Locke attorneys are available to assist the construction industry understand and comply with the new VOSH Policy.

[1] See Va. Code § 60.2-212 (unemployment compensation); Va. Code § 40.1-29 (minimum wage requirements); Va. Code § 40.1-49.3 (VOSH); Va. Code § 65.2-101 (workers’ compensation); 29 U.S.C. § 2601 et seq. (FMLA); 29 U.S.C. § 201 et seq. (FLSA); 42 U.S.C. § 12101 et seq. (ADA). [2] http://www.doli.virginia.gov/vosh_enforcement/employee_misclassification.html

OSHA Updates Its Whistleblower Investigations Manual

Posted in Citations, Employment & Labor Law, Standards and Regs, Virginia OSHA

Bigstock-Integrity-Compass-37589140For the first time since September 2011, OSHA published a new Whistleblower Investigations Manual (CP 02-03-005).  The update, which was released on May 21, 2015, will impact how OSHA investigates whistleblower claims and how parties may resolve them.

Changes of note include:

  • More information on punitive damages, including the recognition of an employer’s good faith defense to such damages.
  • Procedures for investigating MAP-21 whistleblower claims (protecting workers who report defects in automobiles).
  • Substantive changes to Chapter 6 (settlement agreements and remedies), including the instruction for investigators to consider making employer-mandated training on whistle-blowing rights a mandatory settlement term.
  • Greater guidance on damages for emotional distress.
  • Front pay may be appropriate when an employee would face “debilitating anxiety” or other mental health risks (instead of just when reinstatement would be too disruptive).

Employers facing current or potential claims under any of the 22 whistleblower statutes investigated by OSHA should carefully evaluate the new manual and consult with their defense counsel.