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Author archives: Jessica Perdue

25
Jun
2020

Virginia Minimum Wage Increase

(Part Three of a Four-Part Series

By Kristina Keech Spitler, Esq. and Brendan F. Cassidy, Esq.

Virginia employers will need to comply with a new Virginia minimum wage increase to $9.50 an hour starting May 1, 2021. Initially the minimum wage increase was planned for January 1, 2021, but Governor Northam delayed the increase as a result of the COVID-19 pandemic.

Virginia will also increase the minimum wage several times over the next few years under the following schedule:

  • January 1, 2022 – $11.00 per hour.
  • January 1, 2023 – $12.00 per hour.
  • January 1, 2025 – $13.50 per hour.
  • January 1, 2026 – $15.00 per hour.

Although the initial start of the minimum wage increase was delayed, the subsequent wage increase dates currently remain the same.

These increases would apply to most employees in Virginia, including home care providers (the new law removed home care providers from the list of employees exempt from minimum wage requirements). 

The new minimum wage increase will not just apply to private employers, but also to the Commonwealth, any of its agencies, institutions, or political subdivisions, and any public body. 


For further information or questions about these new laws, or for any questions regarding employment laws applicable to Virginia employers, please contact Ms. Spitler or Mr. Cassidy at Vanderpool, Frostick & Nishanian.  The attorneys in the employment law department of VFN are available to help you revise your employee handbook and policies as well as provide training so that your organization complies with these new and other applicable law.  Alternatively, if your organization does not have an employee handbook, our firm can draft a handbook tailored to meet your business’s needs.

For further information or questions, please visit our site
Employment Law or Call Us (703) 369-4738

25
Jun
2020

Employers Who Fail to Pay Wages: Employee Private Right of Action

(Part Three of a Four-Part Series

By Kristina Keech Spitler, Esq. and Brendan F. Cassidy, Esq.

While businesses have been focused on dealing with the Covid-19 pandemic, working remotely, educating kids, and figuring out how to return to work safely, new laws will go into effect starting on July 1, 2020 that you need to know about.  These laws will significantly impact Virginia employers.

Due to the enactment of these new laws in Virginia, businesses will need to understand what the laws require, update their pay statements, educate and train their supervisors/managers accordingly, and ensure compliance with upcoming state minimum wage and hour increases. If an employer is a general construction contractor, they will also want to review their subcontractor agreements, or face wage and hour liability for subcontractor violations.

Employee Private Right of Action

The General Assembly passed a new law (effective July 1, 2020) which will allow employees to bring a private cause of action against employers who fail to pay them their wages. Under the new law, employees may bring such an action individually, jointly, with other aggrieved employees, or on behalf of similarly situated employees as a collective action. 

General Construction Contractor Liability for Subcontractor Failure to Pay Wages

Under the new law, a general construction contractor is liable for subcontractor wage violations. For any construction contract entered into on or after July 1, 2020, the general contractor and subcontractor are jointly and severally liable to pay the greater of:

  1. The rate and terms in an employment agreement between the subcontractor and its employees, or
  2. The amount of wages the subcontractor is required to pay under applicable law. The general contractor is also subject to all penalties, criminal or civil under existing law.

However, this new law also requires subcontractors to indemnify general contractors (except as stated in a contract) for wages, damages, interest, penalties, or attorney’s fees owed as a result of the subcontractor’s failure to pay, unless the failure to pay subcontractor’s employees was a result of the general contractor’s failure to pay the subcontractor.


For further information or questions about these new laws, or for any questions regarding employment laws applicable to Virginia employers, please contact Ms. Spitler or Mr. Cassidy at Vanderpool, Frostick & Nishanian.  The attorneys in the employment law department of VFN are available to help you revise your employee handbook and policies as well as provide training so that your organization complies with these new and other applicable law.  Alternatively, if your organization does not have an employee handbook, our firm can draft a handbook tailored to meet your business’s needs.

For further information or questions, please visit our site
Employment Law or Call Us (703) 369-4738

25
Jun
2020

Required Written Statement of Hours Worked

(Part Three of a Four-Part Series

By Kristina Keech Spitler, Esq. and Brendan F. Cassidy, Esq.

While businesses have been focused on dealing with the Covid-19 pandemic, working remotely, educating kids, and figuring out how to return to work safely, new laws will go into effect starting on July 1, 2020 that you need to know about.  These laws will significantly impact Virginia employers.

Due to the enactment of these new laws in Virginia, businesses will need to understand what the laws require, update their pay statements, educate and train their supervisors/managers accordingly.

A new law effective January 1, 2020, requires employers to provide employees with a written statement – by a paystub or online accounting – showing the employer’s name and address and the number of hours the employee worked during the pay period. An amendment to this new law, effective March 10, 2020, clarifies that employers must only provide this written statement to employees paid on the basis of:

  • (i) the number of hours worked or
  • (ii) a salary less than the DOL’s minimum salary threshold.

The amendment also clarifies that an employer must provide applicable employees with their rate of pay, gross wages earned during the pay period, the amount and purpose of any deductions therefrom, and sufficient information to enable the employee to determine how the gross and net pay were calculated.

Employers should review pay statements it provides employees to ensure compliance with this enacted law.


For further information or questions about these new laws, or for any questions regarding employment laws applicable to Virginia employers, please contact Ms. Spitler or Mr. Cassidy at Vanderpool, Frostick & Nishanian.  The attorneys in the employment law department of VFN are available to help you revise your employee handbook and policies as well as provide training so that your organization complies with these new and other applicable law.  Alternatively, if your organization does not have an employee handbook, our firm can draft a handbook tailored to meet your business’s needs.

For further information or questions, please visit our site
Employment Law or Call Us (703) 369-4738

19
Jun
2020

Marijuana, Arrests, Charges, and Convictions: A New Law Creates Changes For Employers.

**Part Two of a Four-Part Series: Click Here for Full Series**

By Kristina Keech Spitler, Esq. and Brendan F. Cassidy, Esq.  Vanderpool, Frostick & Nishanian, P.C.

In Part 2, we will address a new law that prohibits employers from inquiring into possession of marijuana for employee applicants, and a law that restricts state agencies and localities when inquiring about arrests, charges, or convictions for employee applicants.

Due to the enactment of these new laws in Virginia, businesses will need to understand what the laws require, update their employment applications, and educate and train their supervisors/managers accordingly.

State Agencies and Localities Prohibited from Inquiring about Arrests, Charges, or Convictions from Employment Applicants.

A new law prohibits Virginia state agencies and localities from inquiring whether a prospective employee has ever been arrested, charged, or convicted of a crime until the staff interview stage of the application process. During or after the staff interview stage of the employment application process, a Virginia state agency and locality may inquire whether an employee has been arrested, charged, or convicted of a crime – but not before.     

However, the new law does not require a state agency or locality to wait until the staff interview stage under the following circumstances: positions designated as sensitive; law enforcement agencies; state agencies expressly permitted to inquire into an individual’s criminal arrests or charges; positions for employment by the local school board; positions responsible for the health, safety, and welfare of citizens or critical infrastructure; and positions with access to federal tax information in approved IRS agreements.

In response to the new law, Virginia state agencies and localities should remove from employment applications questions that ask about a prospective employee’s arrests, charges, or convictions. In addition, state agencies and localities should train employees not to ask applicants about arrests, charges, or convictions until the staff interview stage of the application process.

Prohibition Against Inquiring Into Possession of Marijuana for Employee Applicants

Private Employers

A new law provides that Virginia employers are prohibited from requiring employment applicants to disclose information concerning any arrest, criminal charge, or conviction for unlawful marijuana possession in any application, interview, or otherwise.

Public Employers

This new law also prohibits state and local government agencies, officials, and employees from requesting from applicants for governmental service, information regarding marijuana possession arrests, charges, or convictions.  Unlike the law discussed above – which prohibits state agencies and localities from inquiring into general arrests, charge, or convictions until the staff interview stage – state and local government agencies cannot inquire about marijuana possession arrests, charges, or convictions at any stage of the application process.

However, the new law does permit state agencies to use information from an arrest, charge or conviction that is open for public inspection, for purposes such as:

  1. Screening for full-time or part-time employment with the State Police or a police department or sheriff’s office that is a part of or administered by the Commonwealth or any political subdivision;
  2. Screening persons who apply to be a volunteer with or an employee of an emergency medical services agency;
  3. Screening for full-time or part-time employment with the Department of Forensic Science; or
  4. By the Department of Motor Vehicles for the purpose of complying with the regulations of the Federal Motor Carrier Safety Administration.

Penalties for Public and Private Employers

Employers should take this new law seriously since a violation can result in criminal prosecution for individuals who violate the law. A person who willfully violates this law is guilty of a Class 1 misdemeanor for each violation.

If an employer has a form inquiring whether an individual has been charged or convicted of a crime, they should include a carve out stating that this inquiry does not apply to the arrest, criminal charge, or conviction of a person for unlawful possession of marijuana. Similarly, employers should train employees not to inquire about any arrests, charges, or convictions for marijuana possession. Employers should also be aware of EEOC guidance regarding the use of employee arrests, charges, or convictions in employment decisions.


For further information or questions about these new laws, or for any questions regarding employment laws applicable to Virginia employers, please contact Ms. Spitler or Mr. Cassidy at Vanderpool, Frostick & Nishanian.  The attorneys in the employment law department of VFN are available to help you revise your employee handbook and policies as well as provide training so that your organization complies with these new and other applicable law.  Alternatively, if your organization does not have an employee handbook, our firm can draft a handbook tailored to meet your business’s needs.

For further information or questions, please visit our site
Employment Law or Call Us (703) 369-4738

17
Jun
2020

Sexual orientation, gender identity, and veteran status were added to the list of protected classifications in Virginia

**Part One of a Four-Part Series: Click Here for Full Series**

By Kristina Keech Spitler, Esq. and Brendan F. Cassidy, Esq. Vanderpool, Frostick & Nishanian, P.C.

While businesses have been focused on dealing with the Covid-19 pandemic, working remotely, educating kids, and figuring out how to return to work safely, new laws will go into effect starting on July 1, 2020 that you need to know about. These laws will significantly impact Virginia employers.

Amendments to the Virginia Human Rights Act

The General Assembly passed the Virginia Values Act and other amendments that significantly amended the Virginia Human Rights Act (“VHRA” or “Act”). Generally, it

  1. added additional protected classifications;
  2. further clarified and expanded types of prohibited discrimination
  3. included the requirement that employers provide reasonable accommodations for pregnant workers
  4. expanded the definition of “employer” thus expanding the scope of employers subject to the newly revised Act; and
  5. provided new remedies. Now, almost all Virginia employers (except those with five or less employees) will be subject to the Act, which significantly increases the number of businesses covered by the Act as well as their liability associated with employment discrimination claims.

Additional Protected Classifications and Clarification/Expansion of Types of Discrimination

Sexual orientation, gender identity, and veteran status were added to the list of protected classifications under VHRA. Discrimination based on race was defined to now specifically include discrimination based on traits historically associated with race, including hair texture, hair types, and protective hairstyles such as braids, locks, and twists.

Amendments Related to Pregnancy and Childbirth

While VHRA already prohibits discrimination on the basis of pregnancy and childbirth or related medical conditions, it now specifically states childbirth and related medical conditions includes “lactation.”  Employers are also required to provide reasonable accommodations related to pregnancy, childbirth or other medical conditions including lactation, unless the accommodation would impose an undue hardship on the employer. Employers are also prohibited from taking adverse actions against an employee for requesting such accommodations.

The Act requires employers to provide notice to their employees of these rights by posting information in a conspicuous location and also including it in their employee handbooks. In addition, employers must also provide such information to new employees upon commencement of their employment, and within 10 days of an employee providing notice to the employer that she is pregnant.

Summary of Protected Classifications Under Amended VHRA

Accordingly, pursuant to VHRA as of July 1, 2020, it will be unlawful for an employer to discriminate against an employee because of race, color, religion, national origin, sex, pregnancy, childbirth or related medical conditions, age, marital status, sexual orientation, gender identity, disability, or status as a veteran.

Expansion to Cover Almost All Employers

Prior to July 1, 2020, VHRA only applied to a very small group of employers that were too small to be covered by federal anti-discrimination laws. Essentially, it only applied to employers with between six and fourteen employees and the law made only it unlawful to terminate employment based on unlawful discrimination.

The new amendments significantly overhaul the VHRA. The amended VHRA defines “employer” to include every business with fifteen or more employees. Therefore, for employers with fifteen or more employees, they are now subject to the VHRA for discrimination in the employment relationship for such things as compensation, promotions, and job assignments.  In addition, the Act will apply to all employers with more than five employees for claims that an employee was unlawfully terminated due to prohibited discrimination (other than based on age).  For age-related termination claims, the Act covers employers with between six and nineteen employees.

Expansion of Remedies

Under the existing VHRA, the remedies for unlawful termination based on prohibited discrimination are limited to twelve months of back pay and recovery of attorneys’ fees of no more than 25% of the backpay award.  The overhauled VHRA no longer has any cap or limit on the type or amount of damages which can be recovered.  Unlike federal anti-discrimination statutes (which caps recoverable compensatory and punitive damages based on an employer’s size), there is no limit on the amount of compensatory damages that an employee who prevails on their claims will be able to recover – regardless of employer’s size. Punitive damages are already capped in Virginia at $350,000.  The new Act also provides that a successful claimant may recover attorneys’ fees.

Public Employers

The new laws also prohibits public employers such as the state and localities, from discriminating against an individual on the basis of race, color, religion, national origin, sex, pregnancy, childbirth or related medical conditions, age, marital status, disability, sexual orientation, gender identity, or status as a veteran.

Employers May Not Prohibit Employees from Sharing Wage Information

A new law in Virginia provides that employers may not discharge or take a retaliatory action against employees because they:

  1. Discussed or disclosed information to another employee about their own wages and compensation, or wages of others.
  2. Filed a complaint alleging a violation of this Code with Virginia Department of Labor and Industry.

If employers have a policy prohibiting employees from discussing their wages with others, they should remove or revise this policy so that it complies with updated Virginia law.

However, employers may still prohibit employees from disclosing wage information if that employee has access to employee or applicant data as part of their essential job functions. Therefore, employers can still have a policy prohibiting HR or payroll employees from discussing employee information discovered through their job. However, employers cannot prevent these employees from disclosing this information if it is provided in response to a formal complaint, investigation, or consistent with a legal duty to furnish information.

Employers who violate this statute will be subject to a civil penalty of $100 per violation.


For further information or questions about these new laws, or for any questions regarding employment laws applicable to Virginia employers, please contact Ms. Spitler or Mr. Cassidy at Vanderpool, Frostick & Nishanian.  The attorneys in the employment law department of VFN are available to help you revise your employee handbook and policies as well as provide training so that your organization complies with these new and other applicable law.  Alternatively, if your organization does not have an employee handbook, our firm can draft a handbook tailored to meet your business’s needs.

For further information or questions, please visit our site
Employment Law or Call Us (703) 369-4738

16
Jun
2020

You signed a contract for your business – Can the other side come after you personally?

Let’s assume that you are the owner of a small business (a corporation or limited liability company) working to obtain a contract for services for the business. You’ve done your research, found a solid services company to work with, negotiated the services and payment details, and are at the conference room table about to sign the contract. 

Two things could happen here – (1) concerned about the success rate of small businesses, the services company requires that you, as owner of the business, sign a personal guaranty; or (2) the services company does not require any cosigner, guarantor, or personal guarantee.

The services company requires that you, as owner of the business, sign a personal guaranty.

As confident as you may feel about the success of your small business, it is actually common for owners of small corporations and/or LLCs to be required to sign personal guarantees when entering a contract for their business. In this scenario, similar to the one above where the good friend cosigned a lending agreement, you must understand that by guaranteeing or personally cosigning your business’ contract, you are signing away the limited liability rights and status that you may otherwise have had. And, in the worst case scenario where your small business defaults on the contract payment terms, the services company will be able to, within the terms of the guarantee, seek payment directly from you personally!

The services company does not require any cosigner, guarantor, or personal guarantee.

In the second scenario, where the services company does not require that anyone cosign or personally guaranty the services contract, it is imperative that you, the small business owner, take care in signing the document. While it may be second nature to just quickly and casually scribble your name on the signature line, failing to include your title and position in the business or, even better, words similar to “president, signing on behalf of small business” may be a fool’s move! 

Without ensuring that it is perfectly clear that you have signed solely on behalf of the business, you open yourself up to possibly being held personally liable for the contract terms and obligations! Even if you do sign the document as described above, you should also be sure that your signature isn’t doing “double duty.” Specifically, fine print, buried deep in the contract may state that the business signer is also personally liable, even if there is only one signature block! This is a very dubious, but increasingly common, provision; why take the tisk? As such, reviewing not only all of the terms and provisions, but also the signature block, of your small business contract, and then taking care in how you sign such contract, is crucial!

Now, what happens if you do not own the business, but rather are an employee who was tasked with obtaining a contract for the business as part of your job?

In this scenario, it is unlikely that you would have signatory power for the company. In other words, you are not able to sign a contract with any meaningful business title using the words suggested in the above paragraph. As a result, you might be signing the contract personally, which, as above, opens you up to potential personal liability for all of the terms and conditions of the contract.

So, if you are this small business employee tasked with obtaining some sort of goods or services contract for your company, while you should feel comfortable researching providers of said goods and services, when it comes time to sign a contract, it is absolutely in your best interest to hand it over to the boss.

By: Attorney Jonathan Gelber


4
Jun
2020

Are electronic signatures (e-signatures) really binding?

As more and more transactions take place via the internet, it is important for individuals to understand, and be aware of, the liability that may be associated with electronically signing a document.

Virginia, like many other states, has adopted the Uniform Electronic Transactions Act (“UETA”); see Virginia Code § 59.1-479, et seq. The UETA makes it clear that, with few exceptions, one cannot contest the validity of a contract based solely upon one’s electronic signature. Rather, “if a law requires a signature, or provides for certain consequences in the absence of a signature, an electronic signature satisfies the law.” Virginia Code § 59.1-485(d).

Therefore, unless an exception applies to the document in question, it is important to understand that an electronic signature has the same strength and validity as a hard copy signature.

Additionally, not only does an electronic signature bind the signor, but the Fourth Circuit Court of Appeals has held that by clicking “I Agree” at the end of online terms and conditions agreement, one has electronically signed that document and is bound by its provisions.

By: Attorney Jonathan Gelber

3
Jun
2020

CARES Act Grant Funds Available for Manassas Businesses

The City of Manassas is launching a new small business relief grant program. The City anticipates receiving CARES Act funds from the Federal government which may be used, in part, to provide support for small businesses adversely impacted by the COVID-19 pandemic. The City Council and the Economic Development Authority (EDA) intend to use some of these funds to establish a small business grant program. The grant funds are intended to provide support for small businesses of all types which have seen significant revenue losses due to the COVID-19 Pandemic.

The grant application and guidelines can be found on the City’s economic development website at www.ChooseManasssas.org. Or you can read more about this program in the EDA’s June 1st press release HERE.

VF&N is legal counsel to the Manassas City Economic Development Authority (EDA) and commends the EDA’s efforts for providing resources and support throughout the crisis.

11
May
2020

Can a rescue squad protect itself from local government accountability by becoming a non-stock corporation?

The Local Government Attorneys of Virginia hired Martin Crim of Vanderpool, Frostick & Nishanian P.C. to draft an amicus curiae brief in the Virginia Supreme Court case of Dumfries-Triangle Rescue Squad v. Board of County Supervisors of Prince William County. 

The case started when members of the rescue squad falsified operational records and the County’s Operational Medical Director refused to renew the operating license for the rescue squad. In response, the Board of Supervisors dissolved the Rescue Squad pursuant to statute and the agreement between the County and the Rescue Squad.

The Rescue Squad refused to wind up its affairs, however, claiming that its incorporation as a nonstock entity in 1959 made it immune to dissolution by the County. The Virginia Supreme Court allowed the appeal on the questions of whether the County had the authority to dissolve the Rescue Squad and whether the trial court was right to order the Rescue Squad to distribute its assets to the County.

The appeal presented the novel question of whether a rescue squad can unilaterally protect itself from local government accountability by becoming a non-stock corporation.

The amicus brief pointed out the state law has, since 1970, authorized local governments to regulate and even dissolve volunteer rescue squads, and similar laws apply to volunteer fire companies. Rescue squads are funded in large part with donations from private individuals and local governments, so the amicus brief argued that local governments need to have the ability to supervise, regulate, and, when necessary, dissolve rescue squads. State law has granted local governments those powers since 1970, and such laws affect rescue squads that existed before 1970 because the General Assembly has the power to affect existing corporations with new legislation designed to protect public health and safety.


* NO GUARANTEE OF RESULTS: Our prior results, including successful judgments and settlements, do not guarantee a similar outcome. Each case we handle is different and therefore we cannot guarantee any specific result in your case.

11
May
2020

Exit Strategy: Does your business need a buy-sell agreement?

An exit strategy is the method by which a business will transfer ownership (all or only a portion of it) to a third party at some point in the future. This is often memorialized in a company’s Operating Agreement, Bylaws, or other formal and binding contracts, and is typically referred to as a buy-sell agreement or buyout provision. There is no question that, at some point, every small business owner is going to have to leave his or her business, in one form or fashion.

The following are among the most common “trigger events” that should be considered:

  1. Divorce. This can be between co-owners, or between one of the business owners or LLC members and his or her non-owning spouse;
  2. Deadlock or disagreement amongst the business owners or LLC members;
  3. A business owner of LLC member has a personal bankruptcy;
  4. Default on a loan secured by an ownership interest;
  5. Death, disability, or incapacity of an owner or LLC member; and
  6. An owner or LLC member simply wants to leave the business and move on.

Crafting an exit strategy

Regardless of where it is written, or what it is called, a business’ exit strategy should at least contain the following:

  1. Identification of what events will trigger the provision ( listed above)
  2. Identification of the ways in which a business owner/member can transfer his or her interest in the entity
  3. Details regarding how that interest will be valued.

What are the ways out?

As far as a small business is concerned, there are typically four ways that an owner or LLC member can move on:

  1. Sell to a Third Party: While this method typically results in the largest net gain for the selling individual, the downside is that it’s difficult to determine whether the third party buyer will share the business vision of the remaining owners/members.
  2. Sell to a Family Member: Unlike when selling to a third party, individuals tend to be comfortable selling to a family member, as there is an increased likelihood that he or she will run the business with some continuity and degree of care. Leaving a running business to a family member can also be a great gift! Conversely, however, one’s family members may not have any interest in participating in the business and, even if they do have the interest, they may not have the skills to run the business.
  3. Sell to an Employee(s): This option can be great for the selling owner if he or she utilizes an Employee Stock Ownership Plan (ESOP), which will provide him or her with some nice tax advantages. It is important to consider, however, how the employee(s) will pay to purchase your interest, as they may not have large amounts of funds laying around.
  4. Close or Liquidate the Business: This method seems to be used more by closely held businesses, with only one or two owners, and often ends up being the easiest way out. With that ease, however, comes the downside of the owner(s) not receiving a significant, if any, return, and the employees being out of a job.

How will the business be valued?

Finally, an exit strategy should detail how the business, or the various ownership or LLC membership interests in the business, will be valued for sale purposes. The question of valuation is a complex one, often resulting in heated disagreements and sometimes delaying, or even completely interrupting, the sale process. As such, the following is a very brief overview of various things you ought to consider.

Initially, all of the owners or members of a business can agree on a valuation amount each year, however it bears considering that when the triggering event occurs, the actual value of that interest will likely be different from the earlier agreed upon number. Alternatively, upon the occurrence of a triggering event, the value of the business, or a given interest in the business, may be determined by (1) a calculation using historic company data; (2) the company’s Board of Directors after consultation with various financial professionals; or (3) a professional appraisal, which would be guided by a market, asset, or income approach.

Regardless of which valuation approach is used, a business’ value will ultimately be determined by how much the market, or a specific buyer, is willing to pay for an interest in that business.

We’ve discussed all of this, so now what?

Now that you’ve spent a good deal of time contemplating and negotiating the above topics, it is imperative that the final exit strategy – whether it be in the form of a buy-sell agreement or otherwise – be included in your business’ governing documents. As the saying goes – if you fail to plan, then you’re just planning to fail!

If you’re just starting a new business, or have a strong business but no exit strategy, please give us a call to see how our experienced business lawyers can help you draft and execute a buy-sell agreement most favorable to your interests!

By: Attorney Jon Gelber