The 2023 Virginia legislative session closed last month with substantially less activity than we have seen in recent years, in light of the politically divided government in the Commonwealth. The following briefly describes some employment-related bills that were enacted this term.

Use of Employee Social Security Numbers

On March 21, 2023, the governor signed into law Senate Bill 1040 prohibiting the use of employees’ social security numbers in certain ways. Specifically, SB 1040 adds Virginia Code § 40.1-28.7:10 to prohibit employers from using an employee’s social security number, “or any number derivative thereof,” as an employee’s identification number. This includes prohibiting employers from using an employee’s social security number, “or any number derivative thereof,” on any identification card or badge, access card or badge, or similar card or badge issued to employees. While the law does not define what a “derivative thereof” means, it likely includes portions of an employee’s social security number, such as the last four digits. Employers that knowingly violate this law are subject to a civil penalty of up to $100 per violation. This law will go into effect July 1, 2023.

Nondisclosure, Confidentiality & Non-Disparagement Agreements Regarding Claims of Sexual Harassment

The Virginia governor has approved House Bill 1895, which prohibits employers from requiring an employee or prospective employee from executing or renewing a “nondisclosure or confidentiality agreement, including any provision relating to non-disparagement, that has the purpose or effect of concealing the details relating to a claim of sexual harassment … as a condition of employment.” Any such provision is considered void and unenforceable.  This bill amends Virginia Code § 40.1-28.01, which already prohibited nondisclosure and confidentiality agreements relating to claims of sexual assault.  The amendment now also prohibits non-disparagement provisions relating to claims of sexual assault and expands these prohibited agreements from claims of sexual assault to claims of sexual harassment as defined by Virginia Code § 30–129.4.  This Virginia law defines sexual harassment as any “unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature when such conduct explicitly or implicitly affects an individual’s employment, unreasonably interferes with an individual’s work performance, or creates an intimidating, hostile, or offensive work environment.”

Unlike the federal Speak Out Act, which President Biden signed into law in December 2022, the Virginia law does not apply to severance agreements or other post-termination agreements. Nevertheless, this new Virginia law likely applies to blanket confidentiality and non-disparagement agreements that employees may be required to enter into at the onset of employment or as employers update their policies. To the extent any of these provisions are in any of an employer’s pre-employment agreements, they should revise them with a carveout for claims of sexual harassment. The law goes into effect on July 1, 2023.

Sub-Minimum Wage Workers

Following the adoption of the governor’s recommendations, the Virginia House of Delegates enacted House Bill 1924 on April 12, 2023. Virginia Code § 40.1-28.9 has historically allowed employers with a special certificate issued under 29 U.S.C. § 214(c) of the Fair Labor Standards Act of 1938, to employ individuals with disabilities at a sub-minimum wage. House Bill 1924 removes this exception to the Virginia Minimum Wage Act.

Effective July 1, 2023, no employer in Virginia may pay sub-minimum wages unless they had a 14(c) exemption prior to that date. Employers that had a 14(c) exemption prior to July 1, 2023, have until July 1, 2030, when the exemptions end, to increase the pay rates of disabled workers to at least the minimum wage in Virginia.

Organ Donation Leave

On April 12, 2023, the Virginia House of Delegates adopted the governor’s recommendations and enacted legally protected leave for organ and bone marrow donation. Senate Bill 1086 requires Virginia employers with 50 or more employees to provide eligible employees with up to 60 business days per 12-month period of unpaid organ donation leave and up to 30 business days per 12-month period of bone marrow donation leave. Employees are eligible if they have worked for the employer for at least a 12-month period and 1,250 hours during the preceding 12 months.

While the leave is unpaid, the law requires employers to restore eligible employees who take this leave to the position they held before the leave began, or an equivalent position with equivalent pay, benefits, and other terms and conditions of employment. Employers must also maintain coverage of an employee’s health benefit plan while they are taking the leave in the same manner as if the employee did not take leave and pay any commissions during organ donation leave that become due because of work the employee did before taking the leave. Employers are prohibited from treating organ donation leave as a break in an employee’s continuous service for purposes of the employee’s right to salary adjustments, sick leave, vacation, paid time off, annual leave, seniority, or other employee benefits.

Employers are also prohibited from retaliating against employees for requesting or exercising their right to organ donation leave or who have alleged a violation of the organ donation leave law. Organ donation leave will not impact an employee’s ability to take federal Family and Medical Leave Act (FMLA) leave within the same year.  Organ donation leave is separate from federal FMLA leave, i.e., organ donation leave cannot run concurrently with federal FMLA leave.

Violations of the law protecting organ donation leave can result in fines of up to $1,000 for the first violation and, for subsequent violations within two years of any prior violation, of up to $2,500 for the second violation, and up to $5,000 for successive violations. Organ donation leave becomes effective July 1, 2023.

Virginia Employment Commission Subpoenas

The governor also enacted House Bill 2010, which gives Virginia Employment Commission (VEC) attorneys the authority to issue subpoenas. Specifically, the law allows VEC attorneys to compel the attendance of witnesses or the production of documents deemed necessary as evidence in connection with investigations or adjudications related to the Virginia Unemployment Compensation Act. The new law allows any party to move to quash the subpoena in a Virginia circuit court prior to the date of production.

Going forward, it will be important for employers to be cognizant of these provisions and make any necessary updates to their employment policies and/or agreements prior to the July 1, 2023, effective date. Employers are encouraged to work with counsel to prepare these changes and policies to ensure their compliance.