Virginia Civil Air Patrol Leave Law: Protections for Employees Who Are Civil Air Patrol Volunteers

Virginia’s Civil Air Patrol Leave Law, Va. Code § 40.1-28.7:6 (“CAPLL,” titled “Employers to allow leave for volunteer members of Civil Air Patrol; civil remedy”), provides that employees who are volunteer members of the Civil Air Patrol are entitled to limited amounts of job-protected leave for training for or responding to emergency missions.

Job-Protected Leave For Civil Air Patrol Training and Missions

The CAPLL provides job-protected leave for employees who are volunteer members of the Civil Air Patrol to attend training for emergency missions or to respond to emergency missions. The employee is entitled to this leave without loss of seniority, accrued leave, benefits, or efficiency rating. The job-protected leave is capped at 10 days per year for training and 30 days per year for responding to emergency missions:

A. Any employee who is a volunteer member of the Civil Air Patrol shall be entitled to leaves of absence from his employment without loss of seniority, accrued leave, benefits, or efficiency rating on all days during which such employee is (i) engaged in training for emergency missions with the Civil Air Patrol, not to exceed 10 workdays per federal fiscal year, or (ii) responding to an emergency mission as a Civil Air Patrol volunteer, not to exceed 30 workdays per federal fiscal year.

Va. Code § 40.1-28.7:6(A). Thus, for example, under the CAPLL an employer may not require the employee to use accrued vacation days or other types of accrued leave during the period when the employee is on job-protected Civil Air Patrol leave.

Requirements for Civil Air Patrol Leave

The CAPLL provides that to receive leave under the statute, the employee must provide the employer with (1) certification that the employee has been authorized by an appropriate government authority to respond to or train for an emergency mission, and (2) verification from the Civil Air Patrol that there is an emergency need for the employee’s volunteer service:

B. Any employee requesting leave pursuant to this section shall provide (i) certification that the employee has been authorized by the United States Air Force, the Governor, or a department, division, agency, or political subdivision of the state to respond to or train for an emergency mission and (ii) verification from the Civil Air Patrol of the emergency need of the employee’s volunteer service.

Va. Code § 40.1-28.7:6(B).

No Requirement to Exhaust Other Leave

The CAPLL also includes several provisions about how the leave is to be treated under the employer’s leave policies. While the employer may treat CAPLL leave as unpaid leave, employers may not require an employee to exhaust other forms of leave that the employee may be entitled to (like vacation or allotted personal days) before using the leave to which the employee is entitled under the CAPLL. Further, the law specifies that it while the employer may treat the leave as unpaid, the CAPLL does not prevent an employer from providing the employee with paid leave during the CAPLL leave period:

C. An employer may treat leaves of absence pursuant to this section as unpaid leave. No employer shall require an employee to exhaust any other leave to which the employee is entitled prior to such leaves of absence. Nothing in this subsection shall be construed to prevent an employer from providing paid leave during such leaves of absence.

Va. Code § 40.1-28.7:6(C).

Civil Remedy

Finally, the CAPLL provides a private right of action for employees whose rights under the law are violated. If the employee prevails, the CAPLL allows the employee to recover lost wages, reasonable attorney fees, and costs:

D. Any employee aggrieved by a violation of any provision of this section may bring a civil action to enforce such provision. Any employee who is successful in such action shall be entitled to recover only lost wages, reasonable attorney fees, and court costs incurred in such action.

Va. Code § 40.1-28.7:6(A).

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1-434-218-3133 or send an email to info@coffieldlaw.com.

Originally published on Tim Coffield’s website.

Torres v. Texas Dep’t of Pub. Safety: States Do Not Have Sovereign Immunity Against Damages Claims for Servicemember Discrimination Under USERRA

In Torres v. Texas Dep’t of Pub. Safety, 142 S. Ct. 2455 (2022), the Supreme Court held that States do not have sovereign immunity against damages claims for servicemember employment discrimination in violation of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). The Court determined that by ratifying the Constitution, the States agreed their sovereignty would yield to the national power to raise and support the military. Therefore, Congress was free to exercise this power to authorize private damages suits against nonconsenting States, as provided in USERRA.

Constitutional Background – Sovereign Immunity

The Eleventh Amendment to the U.S. Constitution states:

The judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by citizens of another state, or by citizens or subjects of any foreign state.

Courts have interpreted the Eleventh Amendment and common law as barring suits for damages against states or state agencies. Sovereign immunity generally encompasses suits for damages by an employee against his or her state government employer, unless the employee’s claim is one for which sovereign immunity has been validly abrogated by Congress or waived by the state.

Sovereign immunity is the privilege of the sovereign not to be sued without its consent. As the Supreme Court observed in Virginia Off. for Prot. & Advoc. v. Stewart, 563 U.S. 247, 253-56 (2011), the Court has long interpreted the Eleventh Amendment to confirm the framers’ structural understanding that States entered the Union with their sovereign immunity intact. Thus, the Court has held that States have retained their traditional immunity from suit, “except as altered by the plan of the Convention or certain constitutional amendments.” Alden v. Maine, 527 U.S. 706, 713 (1999).

This principle that States did not retain their immunity “as altered by the plan of the Convention” was particularly important to the decision in Torres.

Additionally, State may waive its sovereign immunity at its pleasure, College Savings Bank v. Florida Prepaid Postsecondary Ed. Expense Bd., 527 U.S. 666, 675–676 (1999), and in some circumstances Congress may abrogate it by appropriate legislation. But in the absence of waiver or valid abrogation, federal courts may not entertain a private person’s suit for damages against a State. Stewart, 563 U.S. at 253-56.

Constitutional Background – Article I and the Power to Raise and Support Armies

Article I of the Constitution grants Congress the power “[t]o raise and support Armies” and “[t]o provide and maintain a Navy.” Article I, § 8, clauses 1, 12–13.

Statutory Background – USERRA

Using that Article I authority, Congress enacted the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). USSERA gives returning servicemembers the right to reclaim their prior jobs with state employers and authorizes servicemembers to file suit if those employers refuse to accommodate veterans’ service-related disabilities. See 38 U.S.C. § 4301, et seq.; 38 U.S.C. § 4313(a)(3).

Facts

Torres enlisted in the Army Reserves in 1989. In 2007, he was called to active duty and deployed to Iraq. While serving in Iraq, Torres was exposed to toxic burn pits, a method of garbage disposal that sets open fire to all manner of trash, human waste, and military equipment. Torres received an honorable discharge. 142 S. Ct. 2455, 2461.

Torres returned home with constrictive bronchitis. This is a respiratory condition that narrowed his airways and made breathing difficult. Torres alleged that this condition left him unable to work his old job as a state trooper. Torres therefore asked his former employer, Texas Department of Public Safety, to accommodate his condition by reemploying him in a different role. Texas refused to provide this accommodation. 142 S. Ct. 2455, 2461.

Torres therefore sued Texas in state court to enforce his rights under USERRA, 38 U.S.C. § 4313(a)(3). Texas tried to dismiss the suit by asserting it had sovereign immunity. The trial court denied Texas’ motion. An appellate court reversed, reasoning that, under Supreme Court precedent, namely Central Va. Community College v. Katz, 546 U.S. 356, 126 S.Ct. 990, 163 L.Ed.2d 945 (2006), Congress could not authorize private suits against nonconsenting States pursuant to its Article I powers except under the Bankruptcy Clause. The Supreme Court of Texas declined to review the case. 142 S. Ct. 2455, 2461.

After the Texas court decision, the Supreme Court issued an important ruling in PennEast Pipeline Co. v. New Jersey, 594 U. S. ––––, 141 S.Ct. 2244, 210 L.Ed.2d 624 (2021). PennEast held that the States waived their sovereign immunity as to the federal eminent domain power pursuant to the “plan of the Convention.” 142 S. Ct. 2455, 2461 (citing PennEast, 141 S.Ct. 2244, 2258).

The Court’s Decision

The Court then took Torres’ case to determine whether, in light of that intervening ruling in PennEast, USERRA’s damages remedy against state employers was constitutional.

Applying the reasoning in PennEast, the Court held that by ratifying the Constitution, the States agreed their sovereignty would yield to the national power to raise and support the Armed Forces. Therefore, in enacting USERRA, Congress validly exercised this power to authorize private damages suits against nonconsenting States for violations of USERRA.

The Court observed that in PennEast, it considered whether Congress could, pursuant to its eminent domain power (another Constitutional power), authorize private suits against States to enforce federally approved condemnations necessary to build interstate pipelines. The PennEast Court had held that Congress could authorize such suits because, upon entering the federal system, the States implicitly agreed their “eminent domain power would yield to that of the Federal Government.” 142 S. Ct. 2455, 2463 (citing PennEast, 141 S.Ct. at 2259).

The Torres Court pointed out that PennEast defined the test for “structural waiver” of sovereign immunity as whether the federal power is “complete in itself, and the States consented to the exercise of that power—in its entirety—in the plan of the Convention.” 142 S. Ct. 2455, 2461-63 (quoting PennEast, 141 S.Ct. at 2263).

Reviewing the text of the Constitution, its history, and past cases, the Court determined that Congress’ power to build and maintain the Armed Forces fit the PennEast test. Under the PennEast test, the Court observed that Congress’ power to build and maintain a national military is “complete in itself.” 142 S. Ct. 2455, 2463, 2466 (citing PennEast, 141 S.Ct. at 2263). As the Court put it in PennEast, when they entered the Union, the States agreed that their sovereignty would “yield … so far as is necessary” to federal policy for the Armed Forces. 142 S. Ct. 2455, 2463, 2466 (quoting PennEast, 141 S.Ct. at 2259). The Court further emphasized that because the States committed not to “thwart” this federal power, “[t]he consent of a State,” including to suit, “can never be a condition precedent” to Congress’ chosen exercise of its authority. 142 S. Ct. 2455, 2459, 2463, 2466 (quoting PennEast, 141 S.Ct. at 2255, 2256–2257). In these circumstances, the States simply “have no immunity left to waive or abrogate.” 142 S. Ct. 2455, 2463 (citing PennEast, 141 S.Ct. at 2263).

Accordingly, when Congress enacted USERRA, it validly exercised its power to authorize private damages suits against nonconsenting States for violations of servicemembers’ rights under USERRA. Texas therefore did not have sovereign immunity against Torres’ damages claim for alleged violations of his rights under USERRA.

Analysis

In sum, in Torres the Supreme Court held that States do not have sovereign immunity against damages claims for servicemember employment discrimination in violation of USERRA. The Court determined that by ratifying the Constitution, the States agreed their sovereignty would yield to the national power to raise and support the military. Therefore, Congress was free to exercise this power to authorize private damages suits against nonconsenting States, as provided in USERRA.

Originally published on Tim Coffield’s website.

Virginia Misclassification Anti-Retaliation Law: Protections for Employees And Independent Contractors Who Report Misclassification

Virginia’s Misclassification Anti-Retaliation Law, Va. Code § 40.1–33.1 (“MARL,” titled “Retaliatory actions prohibited; civil penalty”), provides that employers shall not discharge, penalize, or take any retaliatory action against an employee or independent contractor for reporting, or planning to report, to an appropriate authority an employer’s failure to properly classify an individual as an employee and failure to pay required benefits or other contributions.

The MARL is important because it prohibits employers from retaliating against employees or independent contractors for reporting possible independent contractor misclassification to appropriate authorities.

PROHIBITION ON RETALIATION FOR REPORTING MISCLASSIFICATION

The MARL contains a broad prohibition on employers taking retaliatory actions against employees or independent contractors who engage in either of two “protected activities.” First, the employer cannot retaliate against an individual for reporting or planning to report to appropriate authorities the employer’s failure to properly classify an individual as an employee. Second, the employer cannot retaliate against an individual for being requested or subpoenaed by an appropriate authority to participate in an investigation, hearing, or inquiry by an appropriate authority or in a court action:

A. An employer shall not discharge, discipline, threaten, discriminate against, or penalize an employee or independent contractor, or take other retaliatory action regarding an employee or independent contractor’s compensation, terms, conditions, location, or privileges of employment, because the employee or independent contractor:

1. Has reported or plans to report to an appropriate authority that an employer, or any officer or agent of the employer, has failed to properly classify an individual as an employee and failed to pay required benefits or other contributions; or

2. Is requested or subpoenaed by an appropriate authority to participate in an investigation, hearing, or inquiry by an appropriate authority or in a court action.

Va. Code § 40.1–33.1(A).

GOOD FAITH AND REASONABLE BELIEF

Importantly, the MARL provides that its anti-retaliation protections only apply if the employee or independent contractor who discloses information about suspected worker misclassification has done so in good faith and upon a reasonable belief that the information is accurate:

B. The provisions of subsection A shall apply only if an employee or independent contractor who discloses information about suspected worker misclassification has done so in good faith and upon a reasonable belief that the information is accurate. Disclosures that are reckless or the employee knew or should have known were false, confidential by law, or malicious shall not be deemed good faith reports and shall not be subject to the protections provided by subsection A.

Va. Code § 40.1–33.1(B).

ADMINISTRATIVE PROCESS

The MARL provides an administrative process for individuals who experience retaliation in violation of its provisions. Under this process, an individual who experiences retaliation in violation of MARL may file a complaint with the Commissioner of Labor and Industry. See Va. Code § 40.1–2 (defining “Commissioner” as meaning the Commissioner of Labor and Industry.) The Commission, with the employee’s signed consent, may then institute proceedings against the employer to recover appropriate remedies, including reinstatement and lost wages:

C. Any employee who is discharged, disciplined, threatened, discriminated against, or penalized in a manner prohibited by this section may file a complaint with the Commissioner. The Commissioner, with the written and signed consent of such an employee, may institute proceedings against the employer for appropriate remedies for such action, including reinstatement of the employee and recovering lost wages.

Va. Code § 40.1–33.1(C).

CIVIL PENALTY

Finally, the MARL further provides that an employer that violates its provisions will be subject to a civil penalty in an amount up to the amount of lost wages resulting from the violation:

D. Any employer who discharges, disciplines, threatens, discriminates against, or penalizes an employee in a manner prohibited by this section shall be subject to a civil penalty not to exceed the amount of the employee’s wages that are lost as a result of the violation. Civil penalties under this section shall be assessed by the Commissioner and paid to the Literary Fund.

Va. Code § 40.1–33.1(D).

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1–434–218–3133 or send an email to info@coffieldlaw.com.

Originally published on Tim Coffield’s website.

Virginia Worker Misclassification Law: Protections for Employees Asked to Sign Agreements that Misclassify Them As Independent Contractors

Virginia’s Worker Misclassification Law, VA Code § 58.1–1900–05 (“WML”), emphasizes the rights of employees to be properly classified as such, and makes it unlawful for employers to require or request that employees sign documents incorrectly classifying them as independent contractors. While the WML does not provide a statutory right of action, an employee terminated in violation of the policy stated in this law may have a common law claim for wrongful discharge.

The WML is important because it prohibits employers from asking or requiring workers sign documents that seek to deny them basic employment rights, like payroll taxes, unemployment protections, and overtime and minimum wages, by misclassifying them as independent contractors.

CLASSIFICATION OF EMPLOYEES

Section 1900 creates a default rule that, for purposes of Virginia employment, tax, worker’s compensation, and unemployment benefits laws, an individual is an employee of the company that pays for his services, unless the company or individual can prove that the individual is an independent contractor under IRS guidelines:

A. For the purposes of this title and Title 40.1, Title 60.2, and Title 65.2, if an individual performs services for an employer for remuneration, that individual shall be considered an employee of the party that pays that remuneration unless such individual or his employer demonstrates that such individual is an independent contractor. The Department shall determine whether an individual is an independent contractor by applying Internal Revenue Service guidelines.

VA Code § 58.1–1900(A).

CIVIL PENALTIES

Section 1901 imposes civil penalties on employers, and officers and agents of employers, who fail to properly classify employees as such, and fails to pay taxes, benefits, or other contributions required to be paid with respect to the employee:

Any employer, or any officer or agent of the employer, that fails to properly classify an individual as an employee in accordance with § 58.1–1900 for purposes of this title, Title 40.1, Title 60.2, or Title 65.2 and fails to pay taxes, benefits, or other contributions required to be paid with respect to an employee shall, upon notice by the Department to the affected party, be subject to a civil penalty of up to $1,000 per misclassified individual for a first offense, up to $2,500 per misclassified individual for a second offense, and up to $5,000 per misclassified individual for a third or subsequent offense. Each civil penalty assessed under this chapter shall be paid into the general fund.

VA Code § 58.1–1901.

Debarment Penalty

Section 1902 imposes a debarment penalty, which prohibits public bodies and covered institutions from doing business with a employer that fails to properly classify a worker as an employee:

A. Whenever the Department determines, after notice to the employer, that an employer failed to properly classify an individual as an employee under the provisions of § 58.1–1900, the Department shall notify all public bodies and covered institutions of the name of the employer.

B. Upon an employer’s subsequent violations of subsection A, all public bodies and covered institutions shall not award a contract to such employer or to any firm, corporation, or partnership in which the employer has an interest in the following manner:

1. For a period of up to one year, as determined by the Department, from the date of the notice for a second offense.

2. For a period of up to three years, as determined by the Department, from the date of the notice for a third or subsequent offense.

VA Code § 58.1–1902.

PROHIBITION ON AGREEMENTS MISCLASSIFYING EMPLOYEES AS INDEPENDENT CONTRACTORS

Importantly, Section 1903 prohibits employers from requiring or requesting that a worker sign an agreement or document that results in the misclassification of the employee as an independent contractor, or otherwise does not accurately reflect the worker’s relationship with the employer:

No person shall require or request that an individual enter into an agreement or sign a document that results in the misclassification of the individual as an independent contractor or otherwise does not accurately reflect the relationship with the employer.

VA Code § 58.1–1903.

PROHIBITION ON TERMINATING AN EMPLOYEE FOR REFUSING TO SIGN AN AGREEMENT MISCLASSIFYING THE EMPLOYEE AS AN INDEPENDENT CONTRACTOR

Section 1904 makes it unlawful for an employer to terminate or otherwise discriminate against an employee to refuses to sign a document misclassifying the employee as an independent contract, or for exercising other rights under the WML:

It shall be unlawful for an employer or any other party to discriminate in any manner or take adverse action against any person in retaliation for exercising rights protected under this chapter.

VA Code § 58.1–1904.

REMEDIES

While the WML does not contain a statutory remedy, an employee terminated in violation of the WML’s provisions may be able to bring a common law claim for wrongful discharge in violation of public policy under Bowman v. State Bank of Keysville, 331 S.E.2d 797 (Va. 1985) and its progeny.

RECORDKEEPING

Section 1905 imposes on the Virginia Department of Taxation recordkeeping and reporting requirements relating to the misclassification of employees as independent contractors:

The Department shall report annually to the Governor and the General Assembly regarding compliance with and enforcement of this chapter. The Department’s report shall include information regarding the number of investigated reports of worker misclassification; the findings of such reports; the amount of combined tax, interest, and fines collected; the number of referrals to the Department of Labor and Industry, Virginia Employment Commission, Department of Small Business and Supplier Diversity, Virginia Workers’ Compensation Commission, and Department of Professional and Occupational Regulation; and the number of notifications of failure to properly classify to all public bodies and institutions.

VA Code § 58.1–1905.

This site is intended to provide general information only. The information you obtain at this site is not legal advice and does not create an attorney-client relationship between you and attorney Tim Coffield or Coffield PLC. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Please view the full disclaimer. If you would like to request a consultation with attorney Tim Coffield, you may call 1–434–218–3133 or send an email to info@coffieldlaw.com.

Originally published on Tim Coffield Attorney’s website.

Cruz v. Maypa: Equitable Tolling in FLSA Cases

In Cruz v. Maypa, 773 F.3d 138 (4th Cir. 2014), the Fourth Circuit held that the limitations period for claims under the Fair Labor Standards Act was equitably tolled because the employer failed to post the required notice explaining workers’ rights under the FLSA. The decision is important because it means an employer who fails to post the required notice may lose its ability to assert a statute of limitations defense in FLSA cases.

Statutory Background

Congress enacted the FLSA “to protect all covered workers from substandard wages and oppressive working hours.” Trejo v. Ryman Hosp. Props., Inc., 795 F.3d 442, 446 (4th Cir. 2015) (quotes omitted.) To accomplish these goals, the FLSA requires employers to pay their employees both a minimum wage and overtime pay. Hall v. DIRECTV, LLC, 846 F.3d 757, 761 (4th Cir. 2017).

Specifically, the FLSA requires employers to pay their employees at least the federal minimum wage. 29 U.S.C. § 206(a)(1). And it requires employers to pay not less than time and a half for each hour worked over forty hours during a workweek. Id. § 207(a)(1).

Relevant to the decision in Cruz, the FLSA also requires employers to “post and keep posted a notice explaining the [FLSA] … in conspicuous places”:

Every employer employing any employees subject to the Act’s minimum wage provisions shall post and keep posted a notice explaining the [FLSA], as prescribed by the Wage and Hour Division, in conspicuous places in every establishment where such employees are employed so as to permit them to observe readily a copy.…

29 C.F.R. § 516.4.

Claims for violations of the minimum wage or overtime provisions of the FLSA have a 2- or 3-year statute of limitations. 29 U.S.C. § 255(a).

Facts

This case involved a horrible story of forced labor and human trafficking. Cruz was a citizen of the Philippines. She spoke Tagalog and Kapampangan fluently, and spoke limited English. In 2001, a friend told Cruz about an opportunity to travel to the United States to work for Maypa, who at the time was employed by the World Bank. Cruz submitted her resume. Maypa later faxed Cruz an employment contract. The contract said Cruz would be employed as a domestic employee at Maypa’s house for two years where she would work 35-40 hours per week for $6.50 an hour. Cruz, 773 F.3d at 139-43

Cruz reviewed the contract with the help of friends who were more fluent in English. She was excited about the terms. But before Cruz could sign, Maypa told her over the phone that she would actually be paying Cruz only $250 a month rather than the $6.50 per hour. Cruz did not know that the FLSA required a much higher minimum wage. On January 17, 2002, she signed the contract. Shortly thereafter she left the Philippines for the first time and flew to the United States. Id.

Soon after Cruz arrived in Virginia, the Maypas began subjecting her to inhumane working and living conditions. Cruz was required to work seven days a week for 17 to 18 hours per day. She was expected to remain on call at night. In the six years she remained under the family’s control, Cruz was never allowed to take a day off, even when she was ill. She was expected to provide 24–hour care for all four of the family’s children. She was directed to maintain two separate family homes by mowing the lawns, trimming trees, shoveling snow, cleaning the pool, and performing other landscaping duties. For this labor, Cruz initially was initially paid just $250 per month, or approximately $8 per day. By the time of her escape six years later, Cruz was making $450 per month, which amounted to about $15 per day. Id.

Maypa used Cruz’s immigration status and vulnerable situation to keep her from leaving. Within hours of Cruz’s arrival at Maypa’s home, Maypa confiscated Cruz’s passport. The Maypas never permitted Cruz to return to the Philippines to visit her family, even when relatives died and when her daughter and father suffered life-threatening health events. The Maypas also prohibited Cruz from leaving their homes alone except to walk their dog. Cruz did not know anyone in Virginia besides the family, and they lived in rural areas with no sidewalks and no access to public transportation. She was “effectively trapped in their homes.” In 2008, with the help of a friend in another state,, she escaped. Cruz, 773 F.3d at 139-43.

At no point did the Maypas post the required notice of employees’ rights to minimum wages and overtime wages under the FLSA regulation cited above.

In 2013, more than 5 years after escaping, Cruz filed suit asserting various causes of action, including claims for violation of the FLSA. As noted above, FLSA claims have a 2- or 3-year statute of limitations. 29 U.S.C. § 255(a).

The district court declined to equitably toll Cruz’s claims and therefore dismissed Cruz’s FLSA claims as time-barred because she had not brought them within the FLSA’s maximum three-year limitations period for willful violations. Cruz, 773 F.3d at 142-43.

The Court’s Decision

The Fourth Circuit held that Cruz’s FLSA claims should be equitably tolled due to the defendants’ failure to post the required notice under the FLSA.

In reaching this conclusion, the Court first noted that equitable tolling is generally available when 1) “the plaintiffs were prevented from asserting their claims by some kind of wrongful conduct on the part of the defendant,” or 2) “extraordinary circumstances beyond plaintiffs’ control made it impossible to file the claims on time.” Cruz at 146 (quoting Harris v. Hutchinson, 209 F.3d 325, 330 (4th Cir. 2000) (internal quotation marks omitted)).

The Court evaluated this rule in light of its earlier decision in Vance v. Whirlpool Corp., 716 F.2d 1010 (4th Cir. 1983), which held that the 180–day filing requirement of the Age Discrimination in Employment Act (“ADEA”) was tolled because the plaintiff’s employer failed to post statutory notice of workers’ rights under the ADEA. Cruz at 146 (discussing Vance at 1013).

The Court noted that it made good sense to extend Vance’s reasoning to the FLSA. After all, the notice requirements in the ADEA and the FLSA are almost identical. The ADEA regulation, 29 C.F.R. § 1627.10, requires employers to “post and keep posted in conspicuous places … the notice pertaining to the applicability of the [ADEA]”). Similarly, the FLSA regulation, 29 C.F.R. § 516.4, requires employers to “post and keep posted a notice explaining the [FLSA] … in conspicuous places[.]” The Court pointed out that the purpose of these requirements is to ensure that those protected under the laws are aware of and able to assert their rights.

The Court further observed that neither the ADEA nor the FLSA imposed statutory penalties for failure to comply with the notice requirements. Cruz at 147 (citing Cortez v. Medina’s Landscaping, Inc., No. 00 C 6320, 2002 WL 31175471, at *5 (N.D.Ill. Sept. 30, 2002) (extending an actual notice tolling rule similar to Vance from the ADEA to the FLSA). “Therefore, absent a tolling rule, employers would have no incentive to post notice since they could hide the fact of their violations from employees until any relevant claims expired.” Cruz at 147.

The Court therefore held that its analysis in Vance applied with equal force to the notice requirement of the FLSA. Id.

The Court observed that under Vance, “tolling based on lack of notice continues until the claimant retains an attorney or obtains actual knowledge of her rights.” Cruz at 147 (citing 716 F.2d at 1013). The Fourth Circuit therefore instructed the district court to allow discovery on remand to determine whether Cruz’s FLSA claim was time-barred despite being equitably tolled. Id.

Analysis

In sum, Cruz held that that the limitations period for FLSA claims can be equitably tolled if the employer failed to post the required notice explaining workers’ rights under the FLSA. The decision is important because it means an employer who fails to post the required notice may lose its ability to assert a statute of limitations defense in FLSA cases.

Virginia Minimum Wage Act: Increased Minimum Wages for Virginia Workers

The Virginia Minimum Wage Act, VA Code § 40.1-28.8, et seq. (“VMWA”), sets minimum wage levels for certain categories of Virginia workers that are higher than the federal minimum wage.

Employer Defined

The VMWA defines the “employers” it covers broadly, as including:

any individual, partnership, association, corporation, or business trust or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee.

Va. Code § 40.1-28.9(A). Under the VMWA, “employer” includes the Commonwealth, any of its agencies, institutions, or political subdivisions, and any public body. Id.

Employee Defined

Subject to the exceptions discussed below, VMWA also defines the “employees” it covers broadly, as including “any individual employed by an employer.” Va. Code § 40.1-28.9(A). “Employee” also specifically includes home care providers. Id.

Exceptions from the VMWA

The VMWA carves out many categories of workers that do not qualify as “employees,” and who therefore are not covered by the VMWA’s minimum wage provisions. Under the VMWA, “employees” do not include:

Any person employed as a farm laborer or farm employee;
Any person engaged in the activities of an educational, charitable, religious, or nonprofit organization where the relationship of employer-employee does not, in fact, exist or where the services rendered to such organization are on a voluntary basis;
Caddies on golf courses;
Traveling salesmen or outside salesmen working on a commission basis; taxicab drivers and operators;
Any person under the age of 18 working for his parent or legal guardian;
Any person confined in any penal or corrective institution of the Commonwealth or any of its political subdivisions or admitted to a state hospital or training center operated by the Department of Behavioral Health and Developmental Services;
Any person employed by a summer camp for boys, girls, or both boys and girls;
Any person under the age of 16, regardless of who they work for;
Any person who is paid pursuant to 29 U.S.C. § 214(c) of the Fair Labor Standards Act (special provisions for certain disabled workers);
Students participating in a bona fide educational program;
Any person younger than 18 years of age and who is currently enrolled on a full-time basis in any secondary school, institution of higher education, or trade school, provided that the person is not employed more than 20 hours per week;
Any person of any age who is currently enrolled on a full-time basis in any secondary school, institution of higher education, or trade school and is in a work-study program or its equivalent at the institution at which he is enrolled as a student;
Any person who works as a babysitter for fewer than 10 hours per week;
Any person participating as an au pair in the U.S. Department of State’s Exchange Visitor Program governed by 22 C.F.R. § 62.31;
Any individual employed as a temporary foreign worker as governed by 20 C.F.R. Part 655; and
Any person who is exempt from the federal minimum wage pursuant to 29 U.S.C. § 213(a)(3) (exempting employees of certain types of amusement or recreational establishments, organized camps, or religious or non-profit educational conference centers).

Va. Code § 40.1-28.9(A).

Wages Defined

The VMWA defines “wages” broadly, as

legal tender of the United States or checks or drafts on banks negotiable into cash on demand or upon acceptance at full value. “Wages” includes the reasonable cost to the employer of furnishing meals and lodging to an employee if such board or lodging is customarily furnished by the employer and used by the employee.

Va. Code § 40.1-28.9(A).

Tipped Employee Provision

Under the VMWA, a tipped employee is an employee who customarily and regularly receives tips totaling more than $30 each month from persons other than the employee’s employer. Va. Code § 40.1-28.9(A).

The VMWA has a special provision for calculating the wages of tipped employees. In determining the wages of a tipped employee,

the amount paid such employee by his employer shall be deemed to be increased on account of tips by an amount determined by the employer, except in the case of an employee who establishes by clear and convincing evidence that the actual amount of tips received by him was less than the amount determined by the employer. In such case, the amount paid such employee by his employer shall be deemed to have been increased by such lesser amount.

Va. Code § 40.1-28.9(B). In other words, the employer may take credit towards its minimum wage obligation for the amount of tips the tipped employee receives. However, the VMWA prohibits an employer from classifying an individual as a “tipped employee” if the individual is prohibited by applicable federal or state law or regulation from soliciting tips. Id.

Minimum Wages

The VMWA provides that “employers” must pay to each of their “employees” – as those terms are defined in the VMWA – certain minimum “wages” – as that term is defined. Beginning on May 1, 2021, the Virginia minimum wage exceeds the federal minimum wage. Under the VMWA, the Virginia minimum wage increases over time, as follows:

Time Period	Virginia Minimum Wage under VMWA
Prior to May 1, 2021	A rate not less than the federal minimum wage.
May 1, 2021, until January 1, 2022	A rate not less than the greater of (i) $9.50 per hour or (ii) the federal minimum wage.
January 1, 2022, until January 1, 2023	A rate not less than the greater of (i) $11.00 per hour or (ii) the federal minimum wage.
January 1, 2023, until January 1, 2025	A rate not less than the greater of (i) $12.00 per hour or (ii) the federal minimum wage.
January 1, 2025, until January 1, 2026	A rate not less than the greater of (i) $13.50 per hour or (ii) the federal minimum wage.* *Only if reenacted by July 1, 2024.
January 1, 2026, until January 1, 2027	A rate not less than the greater of (i) $15.00 per hour or (ii) the federal minimum wage.* *Only if reenacted by July 1, 2024.
From and after January 1, 2027	A rate not less than the greater of (i) the adjusted state hourly minimum wage or (ii) the federal minimum wage.

VA Code § 40.1-28.10(A)-(G). As noted above, the VMWA provisions for January 2025 (13.50 per hour) and 2026 ($15.00 per hour) – subsections E and F of VA Code § 40.1-28.10 – only become effective if they are reenacted by a regular or special session of the General Assembly prior to July 1, 2024. Id.

The VMWA further provides a process and formula for setting the “adjusted state hourly minimum wage” on an annual basis beginning in 2026:

By October 1, 2026, and annually thereafter, the Commissioner shall establish the adjusted state hourly minimum wage that shall be in effect during the 12-month period commencing on the following January 1.

VA Code § 40.1-28.10(H). The adjusted state hourly minimum wage is to be set at the sum of:

(i) the amount of the state hourly minimum wage rate that is in effect on the date such adjustment is made, and

(ii) a percentage of the amount described in clause (i) that is equal to the percentage by which the United States Average Consumer Price Index for all items, all urban consumers (CPI-U), as published by the Bureau of Labor Statistics of the U.S. Department of Labor, or a successor index as calculated by the U.S. Department of Labor, has increased during the most recent calendar year for which such information is available.

VA Code § 40.1-28.10(H). The amount of each annual adjustment may not be less than zero. Id.

The VMWA provides a lesser minimum wage rate for any person enrolled in an established employer on-the-job or other training program for a period not to exceed 90 days which meets standards set by regulations adopted by the Commissioner:

Beginning May 1, 2021, every employer shall pay to each of his employees at a rate not less than the federal minimum wage or 75 percent of the Virginia minimum wage … whichever is greater. For the purposes of this subdivision “employee” means any person or individual who is enrolled in an established employer on-the-job or other training program for a period not to exceed 90 days which meets standards set by regulations adopted by the Commissioner.

VA Code § 40.1-28.10(A)(2).

Civil Actions and Remedies for Employees

The VMWA contains a remedies provision. It provides that an employer who violates the law’s minimum wage requirements is liable to the affected employee or employees affected for:

the amount of the unpaid minimum wages, and
interest at eight percent per year on the unpaid wages, with the interest to be awarded from the date or dates the wages were due.

VA Code § 40.1-28.12. In addition to any judgment awarded to the employee or employees, the court may also require the employer to pay reasonable attorney’s fees incurred by the employee or employees. Id.