RICHMOND, Va. – Attorney General Mark Herring announced Wednesday 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. It 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 as well as 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 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.”
Worker exploitation, while it can take many forms, often involves the violation of numerous Virginia criminal statutes, 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 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.