A new Virginia law has made general contractors on large projects liable for the wages of subcontractorsâ employees.
The statuteâs main provisions are as follows:
· Makes the general contractorâand all tiers of subcontractors working on the projectâcontractually liable to pay their subcontractorâs employeesâ wages
· Requires payments equal or to exceed those required by applicable statutes, such as Virginiaâs Minimum Wage Act and the federal Fair Labor Standards Act
· Deems contractors to be the employers of their subcontractorsâ employees for purposes of Virginia Code § 40.1-29, which imposes criminal liability and civil penalties for failing to pay employeesâ wages when due
· Gives all employees the right to sue jointly or as a class action, imposes liquidated damages equal to the wage amounts owed, awards reasonable attorneyâs fees, andâin cases of willful violationsâimposes triple damages.
The statute applies to contracts entered into after July 1, 2020. It governs construction projects valued at $500,000 or more. The new law does not apply to single-family residential construction projects.
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