b'THE OFFICIAL NFBA MAGAZINEWORKER CLASSIFICATION LEGISLATION MOVES AHEAD IN VIRGINIABUSINESS MANAGEMENTBY Andrew M. BallardBloomberg LawThe Virginia state capitol.Photographer: Drew Angerer/Getty ImagesV irginia lawmakers are advancing legislationdeemed to be employees under the law. states thatwouldpunishemployersforNew Jersey and California both recently enacted misclassifying their workers as contractorsemployeeclassificationlawsandother rather than employees. includingNewYorkareconsideringsimilar The House of Delegates approved a bill (H.B. 1407)legislation. Californias new requirements are facing Tuesday that would impose a fine of up to $1,000multiple court challenges.per worker on businesses that improperly treat their employees as independent contractors. MaximumNorthamissuedanexecutiveorderin2019 fines would be boosted to $2,500 per misclassifiedcalling for an inter-agency task force to make individual for second offenses and to $5,000 for anyrecommendations on how to address the issue in additional violations. Virginia. The pending measures stem from that study.Virginias Senate approved its version of the measureWhen he announced the study results in November, (S.B. 744) on Jan. 27. Once differences between theNortham said that about 214,000 state workers bills are reconciled, the measure will be sent to Gov.aremisclassifiedascontractors,costingthe Ralph Northam (D), who is expected to sign it. Bothcommonwealth some $28 million in tax revenues versions were approved largely along party lines,each year.with Democrats voting in favor and Republicans against the legislation. The House and Senate bills pending in Virginia Worker classification has attracted growing attentionwould prohibit the awarding of public contracts for a from state lawmakers, partly due to the spread ofcertain period of time to employers that misclassify the gig economy and app-based transportationworkers. The legislation also would allow the state and delivery services such as Uber, DoorDash,Tax Commissioner to share information to help and Lyft that connect workers to consumers. Butwith enforcement. Both versions would take effect the issue affects a broad range of industries suchJan. 1, 2021.as construction, health care, and informationThe bills proposed use of IRS guidelines to determine technology. classification is considered a more employer-Workersproperlyclassifiedasindependentfriendly model than Californias classification law.contractors rather than employees arent guaranteedReproduced with permission from Published Feb. minimum wages, overtime benefits, or other4, 202. Copyright 2020 by The Bureau of National employment protections. That means employersAffairs, Inc. (800-372-1033) http://www.bna.comcan face higher labor and other costs for workers 18 / FRAME BUILDER -APR2020'