Worker misclassification occurs when an employer improperly classifies a worker as an independent contractor instead of as an employee. Some employers in Virginia are concerned about the unfair competitive advantage gained by those who misclassify workers to avoid paying taxes and benefits (lowering their costs by up to 40 percent).
For worker classification purposes, “contractor” refers to someone working under an employment contract or agreement, NOT only construction-related activities.
Employee misclassification undermines those businesses that follow the law by allowing unscrupulous employers to undercut bids because they avoid payroll costs. Virginia is committed to leveling the playing field for employers that play by the rules.
Although DPOR does not enforce wage, unemployment benefit, or workers' compensation laws, we work in concert with other state agencies (DOLI, VEC, VWC) to protect the public's health, safety and welfare, while promoting our Commonwealth's strong business climate.