|RICHMOND (March 3, 2021) – Attorney General Mark R. Herring today announced the designation of the Virginia Attorney General’s first Worker Protection Unit, a multidisciplinary team of prosecutors and attorneys within the Office of Attorney General, which will be led by a dedicated criminal prosecutor, that will focus on investigating, stopping, and prosecuting individuals and businesses who unlawfully engage in worker exploitation, in addition to educating Virginia workers on their rights.
As its first area of focus, the team will focus on worker misclassification, wage theft, and payroll fraud, and work to coordinate efforts across state government with the goal of bringing cases and enforcement actions to stop worker exploitation.
According to a 2012 report by the Joint Audit and Legislative Review Commission, “up to one-third of audited employers in certain industries misclassify employees.” The report estimated that, as of 2012, the practice of worker misclassification “lowered Virginia’s state income tax collections as much as $28 million per year, in addition to the reduction in pay and benefits suffered by workers who are misclassified.
“Misclassification, payroll fraud, and wage theft are somewhat complicated terms, but at their simplest they are all instances of business owners and managers stealing from their hardworking employees,” said Attorney General Mark Herring. “This new Worker Protection Unit is going to help root out cases of worker exploitation and wage theft and send a clear signal to Virginia workers that we’ve got their back, and to bad businesses that we are watching and we will prosecute them if they try to take advantage of their workers, or steal from their employees or the Commonwealth.
“For way too long, Virginia’s weak worker protection laws have made it way too easy for business managers, owners, and labor brokers to cheat their workers and cheat the Commonwealth. Managers and owners hope that workers won’t notice that they’re being stolen from, or will simply be too afraid to complain because they don’t want to lose their job or worse. It’s a really insidious form of exploitation that hides in plain sight. Thankfully, that is finally starting to change with the enactment of new laws to protect workers from wage theft and misclassification, and to make these crimes easier to detect and easier to charge. We are going to do all we can to enforce these new protections, even as we keep fighting to enact even stronger protections for workers.”
“The formation of the Worker Protection Unit sends a strong message to those who exploit workers and steal tax dollars in Virginia,” said Ron Meischker, Director of Industry Labor & Compliance with the Eastern Atlantic States Regional Council of Carpenters. “We applaud General Herring for taking the initiative to protect the Commonwealth’s workers.”
“Virginia workers deserve an attorney general who will stand up for them to protect their rights and their paychecks, and they’ve got one in Attorney General Herring,” said Senate Majority Leader Dick Saslaw. “I’ve served in the legislature for more than 40 years with seventeen different AGs and I believe this is the most significant pro-worker move that I’ve ever seen a Virginia Attorney General make.”
“Virginians should never have to worry about being taken advantage of or exploited by their employer. Not only does worker exploitation and misclassification cheat hardworking Virginians out of money, but it cheats the state out of money as well. It’s a crime and it must be stopped,” said Senator Jeremy McPike. “Putting a stop to worker misclassification has been a priority for me and I’m glad Attorney General Herring is taking this important step in protecting the Commonwealth’s workers by creating the Worker Protection Unit.”
“Every single person who works in Virginia deserves to be paid a fair and full wage, but unfortunately, there are some employers and businesses who think it’s okay to cheat their employees out of their full pay,” said Delegate Karrie Delaney. “I’ve introduced legislation in the past that would crack down on worker misclassification in Virginia and I want to thank Attorney General Herring for stepping up and being proactive in protecting Virginia’s workers.”
Worker exploitation, while it can take many forms, often involves the violation of numerous Virginia criminal statues, including Va. Code Sec. 40.1-29, which makes withholding of wages a crime, as well as perjury, making false statements to government entities, or insurance fraud.
Worker misclassification—one of the most common forms of worker exploitation—involves falsely identifying individuals as “independent contractors” when they are really employees. This allows employers to avoid paying unemployment and other taxes on workers and to avoid the costs of covering the employees with workers’ compensation and unemployment insurances, and it has been consistently shown to drive down the wages of other workers.
The new Worker Protection Unit will be led by a dedicated criminal prosecutor who will investigate claims of worker exploitation, build cases, and convene a multidisciplinary team of attorneys and state agencies as needed to advance cases and ensure the Commonwealth is working in a coordinated fashion to combat worker exploitation. The Unit will also work to educate Virginia workers on their rights under Virginia and federal law.
The multidisciplinary team will include OAG attorneys with expertise in labor law, tax law, insurance law, criminal prosecution, and laws and regulations governing the construction industry, as well as additional attorneys and subject matter expertise as necessary.
The Unit will also engage, as needed, with state agencies that have enforcement and oversight authority around worker protection laws including the Virginia Department of Taxation, Virginia Employment Commission, Virginia Department of Labor and Industry, and Office of Inspector General.
In recent legislative sessions, the General Assembly has eliminated some barriers to combating worker exploitation while also enacting enhanced legal protections for working Virginians. These enhancements include, among others, imposing general contractor liability for wages to subcontractor employees (Sec. 11-4.6) and the requirement that employers issue standardized pay statements to workers (40.1-29(C)). Attorney General Herring’s new Worker Protection Unit represents a massing of resources to ensure those protections are honored in Virginia’s workplaces.