In conducting Inspections, VOSH now also will evaluate whether the employer has improperly classified workers as independent contractors. Some employers may attempt to reduce payroll costs by treating workers as independent contractors rather than as direct employees. Virginia Governor Terry McAuliffe recently issued an executive order directing state agencies to evaluate whether workers are properly […]

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In conducting Inspections, VOSH now also will evaluate whether the employer has improperly classified workers as independent contractors. Some employers may attempt to reduce payroll costs by treating workers as independent contractors rather than as direct employees. Virginia Governor Terry McAuliffe recently issued an executive order directing state agencies to evaluate whether workers are properly classified, asserting that an unfair competitive advantage is realized by employers who improperly lower payroll costs by misclassifying employees as contractors. The Governor‚ directive does not alter the familiar test for proper classification of a worker as an employee or a contractor. For VOSH that evaluation will be conducted during an OSHA inspection. If VOSH finds misclassification, here is what they will do about it:

VOSH Policy
Effective July 1, 2015, where VOSH has reasonable cause to believe that worker misclassification has occurred in a VOSH case, the following actions will normally be taken:

• In the event that citations and penalties are proposed for the employer, penalty reductions for size and good faith will NOT be afforded to the employer

‚Ä¢ In construction multi-employer worksite situations, each contractor (e.g., general contractors, prime subcontractors and lower tier subcontractors) will be asked to provide proof of their Department of Professional and Occupational Regulation (DPOR) contractor’s license AND for proof of the DPOR license for any of its’ subcontractors

• When it is determined that a construction employer has contracted with an unlicensed subcontractor, VOSH will make a written referral to DPOR for the contractor and its unlicensed subcontractor (DPOR sanctions for contracting with unlicensed subcontractors may include fines, probationary terms, suspension or license revocation)

‚Ä¢ In cases where the contract value for the specific subcontractor’s job is less than $1,000.00, 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 employer’s employment practices. There may be instances where referrals will be made for contract values over $1,000.00 as well.

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