Virginia Supreme Court: No Individual Liability Under Virginia Wage Payment Law | Williams Mullen
On October 13, 2022, the Virginia Supreme Court ruled that individuals cannot be held liable as “employers” under the recently amended Virginia, Va. Wage Payment Act. Code § 40.1-29 (VWPA). The VWPA was amended effective July 2020 to allow employees to bring private lawsuits, either individually, jointly or on behalf of similarly situated employees, as a class action under the procedures of Federal Fair Labor Standards Act Class Action. Virginia Code § 40.1-29(J).
In Cornell et al. vs. Benoit et al., filed in February 2021, two former employees of Christian Psychotherapy Services (CPS) tested the scope of the amended VWPA by filing a class action not only against CPS, but also against two former CPS board members individually . The plaintiffs alleged that CPS and the individual defendants jointly violated the VWPA, among other things, by failing to pay employees’ final wages when the company ceased operations. The plaintiffs argued that the VWPA defines “employer” in accordance with the FLSA. The Virginia Circuit Court for the City of Virginia Beach disagreed and dismissed the claims against the two individual defendants, finding that the VWPA’s definition of “employer” is narrower than that of the FLSA.
The Virginia Supreme Court upheld the Circuit Court’s decision and held that the VWPA does not provide liability against individuals for actions taken on behalf of an employing entity. The Court considered the definition of “employer” in Va. Code § 40.1-2 and found a “manifest difference in statutory language” between the two statutes. Unlike the FLSA, which defines “employer” to include “every person acting directly or indirectly in the interest of an employer in relation to an employee,” Virginia law does not use the word “person” and instead defines employer by reference only to entities. The Court interpreted this obvious difference as representing a “conscious decision with deliberate implications”. In reviewing dictionary definitions of the term “entity”, the Court further held that natural persons or individuals cannot be “entities”. Thus, unlike the FLSA, the VWPA does not provide for private actions against individuals.
Due to the recentness of the amendments, there has been little guidance or case law interpreting employee enforcement rights under the VWPA. This position is one of the first to interpret Virginia’s recent amendments to its wage and hour laws, as Commonwealth employers and employees continue to wrestle with the scope and limits of these new employee protections. .