Virginia HB 889: Nonpayment of wages; defense of contractor.

Bill Text

VIRGINIAACTSOFASSEMBLY--2022RECONVENEDSESSION
CHAPTER771
An Act to amend and reenact § 11-4.6 of the Code of Virginia, relating to nonpayment of wages;
defense of contractor.
[H889]
ApprovedApril27,2022
Be it enacted by the General Assembly of Virginia:
1. That §11-4.6 of the Code of Virginia is amended and reenacted as follows:
§11-4.6. Liability of contractor for wages of subcontractor's employees.
A. As used in this section, unless the context requires a different meaning:
"Construction contract" means a contract between a general contractor and a subcontractor relating to
the construction, alteration, repair, or maintenance of a building, structure, or appurtenance thereto,
including moving, demolition, and excavation connected therewith, or any provision contained in any
contract relating to the construction of projects other than buildings.
"General contractor" and "subcontractor" have the meanings ascribed thereto in § 43-1, except that
those terms shall not include persons solely furnishing materials.
B. Any construction contract between a general contractor and its subcontractor and any lower tier
subcontract entered into on or after July 1, 2020, shall be deemed to include a provision under which
the general contractor, its subcontractor, and the subcontractor at any lower tier are jointly and severally
liable to pay any subcontractor's the employees of any subcontractor at any lower tier the greater of (i)
all wages due to a subcontractor's employees or to the lower tier subcontractor's employees at such rate
and upon such terms as shall be provided in the employment agreement between the subcontractor and
its employees or (ii) the amount of wages that the subcontractor or any lower tier subcontractor is
required to pay to its employees under the provisions of applicable law, including the provisions of the
Virginia Minimum Wage Act (§ 40.1-28.8 et seq.) and the federal Fair Labor Standards Act (29 U.S.C.
§201 et seq.).
C. A general contractor shall be deemed to be the employer of a subcontractor's employees at any
tier for purposes of § 40.1-29. If the wages due to the subcontractor's employees under the terms of the
employment agreement between a subcontractor and its employees are not paid, the general contractor
shall be subject to all penalties, criminal and civil, to which an employer that fails or refuses to pay
wages is subject under § 40.1-29. Any liability of a general contractor pursuant to § 40.1-29 shall be
joint and several with the subcontractor that failed or refused to pay the wages to its employees.
D. Except as otherwise provided in a contract between the general contractor and the subcontractor,
the subcontractor shall indemnify the general contractor for any wages, damages, interest, penalties, or
attorney fees owed as a result of the subcontractor's failure to pay wages to the subcontractor's
employees as provided in subsection B, unless the subcontractor's failure to pay the wages was due to
the general contractor's failure to pay moneys due to the subcontractor in accordance with the terms of
their construction contract.
E. The provisions of this section shall only apply if (i) it can be demonstrated that the general
contractor knew or should have known that the subcontractor was not paying his employees all wages
due, (ii) the construction contract is related to a project other than a single family residential project, and
(iii) the value of the project, or an aggregate of projects under one construction contract, is greater than
$500,000. As evidence a general contractor or subcontractor, regardless of tier, may offer a written
certification, under oath, from the subcontractor in direct privity of contract with the general contractor
or subcontractor stating that (a) the subcontractor and each of his sub-subcontractors has paid all
employees all wages due for the period during which the wages are claimed for the work performed on
the project and (b) to the subcontractor's knowledge all sub-subcontractors below the subcontractor,
regardless of tier, have similarly paid their employees all such wages. Any person who falsely signs
such certification shall be personally liable to the general contractor or subcontractor for fraud and any
damages the general contractor or subcontractor may incur.