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The Retail Employer

 April 2007

Reminder on Virginia’s Wage Payment Law

by David E. Nagle

For many years, a Virginia statute has prohibited an employer from withholding “any part of the wages or salaries of any employee except for payroll, wage or withholding taxes or in accordance with the law, without the written and signed authorization of the employee.” Another part of the statute provides that “No employer shall require any employee, except executive personnel, to sign any contract or agreement which provides for the forfeiture of the employee’s wages . . . as a condition of employment, or the continuance therein.” Va. Code §40.1-29.

The Virginia Department of Labor and Industry has interpreted the requirement of obtaining the employee’s “written and signed authorization” of the employee, noting that written and signed agreements authorizing these types of withholding are binding only if the agreements are voluntary and not a condition of employment.

With respect to the prohibition on agreements calling for the forfeiture of wages as a condition of employment, the Department views blanket authorizations signed by employees at the commencement of employment which allow such forfeiture as constituting a condition of employment, and not permissible. Only a signed agreement that is truly voluntary, and is not a condition of continued employment, is allowed by this section.

The Department of Labor and Industry has a presumption against the voluntariness of such agreements. “Because of the unequal bargaining power of employers and employees, the voluntary nature of many agreements will be questionable. Any agreement which is clearly not in the employee’s interest will be considered involuntary . . . If the employer benefits (or profits) from the agreement and the employee does not benefit, the agreement may be considered involuntary.”

In an effort to interpret the term “forfeiture”, the Department wrote, “To forfeit is to incur a loss through some fault, omission, error, or offense . . . Examples of forfeitures include deductions from employee wages as ‘punishment’ for such things as: failure to punch the time clock or sign a time card; bad checks or credit card charges by customers; gasoline purchases by customers who drive off without paying; broken dishes, lost silverware, damaged equipment; mathematical errors; cash register shortages; breach of an employment contract or failure to give advance termination notice; (and) violation of a company work rule. Forfeitures do not include deductions for items which benefit, rather than penalize, the employee, such as: uniforms/tools; insurance premiums; (voluntary) escrow accounts; pay advances; repayment of personal loans received from the employer; repayment for equipment or other items purchased or received from the employer.”

Employers, particularly those without experienced human resources professionals on staff, are often unfamiliar with the prohibitions imposed by this statute. They must be particularly cautious with respect to any deductions or withholding from employees’ wages, for the penalty for violation of this statute can be substantial. State law provides that an employer who willfully and with intent to defraud violates these wage payment statutes is generally guilty of a Class 1 misdemeanor, but due to a recent amendment to the statute, if the wages earned and not paid by the employer exceed $10,000, or there is a second or subsequent conviction, the employer is guilty of a Class 6 felony. The determination as to the “value of the wages earned” is made by combining all wages the employer failed or refused to pay pursuant to this section.

Sometimes, because it is so easy to make deductions from employees’ pay, employers are far too casual in doing so. Unless the deductions are required by law (i.e., for taxes, garnishments, or child support enforcement orders), all deductions require the employee’s signed, written authorization. Where the deduction is for the benefit of the employer, it may be subjected to close scrutiny and challenge. Employers need to be attentive to the requirements of Virginia’s statutes relating to payment of wages; the consequences of violations may be severe. Inquiries should be directed to your counsel.

David E. Nagle has been retained by the Association to assist members through the Employment Law Information Program. David is a partner in the Richmond, VA. office of Jackson Lewis LLP. The law firm represents management in labor, employment, benefits and immigration matters, through 400 attorneys in 28 offices across the country. He may be reached at (804) 648-4077, or by email at nagled@jacksonlewis.com.

Calls requesting information on the Labor Law Information Program should be directed to Preston Perrin with the Retail Merchants Association at 804-662-5500.

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Build a Strong Team by Encouraging Friendships

You often hear about the importance of the team in the workplace, but what exactly does this mean? It’s more than simply arranging work groups. The concept of the team includes having your staff experience employee friendships, a sense of community and teamwork-oriented actions. And, it’s more important now than ever before to encourage employee interaction. Just how important? Consider recent research on job satisfaction.

The latest report by the Conference Board showed that workers dislike their jobs more than ever reported in the last 20 years. This trend is especially apparent in younger workers, with less than 39% reporting that they are satisfied with their jobs. Overall, across age, race, income and location, the trend is apparent: most people are not happy at work. And, dissatisfied workers are difficult to retain, motivate and make productive. When it comes to employee job satisfaction, relationships can make all the difference in the world.

In fact, research by the Gallup Organization shows that job satisfaction goes up by 50% for workers who have good friends at work. That’s because relationships are just as important at work as they are in personal life. In fact, they are often more important to workers than money. Gallup has shown that people would prefer to have a best friend at work over a 10% raise. Co-worker friendships encourage employee interaction, offer lighthearted moments and reduce stress. Gallup research also affirms that workers with friends on the job are more innovative, engaged, customer-service oriented and motivated than those without friends at work.

However, as important as friendships, community and teamwork are, managers rarely receive training on how to foster an environment that is friendly toward a workplace community. Instead, people who work in teams often struggle in an environment of competition. They must fight for their own needs instead of the needs of the team. To increase job satisfaction among your team, try implementing these teamwork-friendly tips.

Teamwork-Friendly Tips

  • Allow employees to chat for a few minutes each morning or afternoon.
  • Join in by making friends with your employees.
  • Use icebreakers to start group meetings if your team members don’t know each other well.
  • Encourage hobby clubs facilitated by staff members to meet at lunch once a week.
  • Let employees know it’s OK to have fun at work and joke around sometimes.
  • Ask each team member to share facts about themselves at staff meetings.
  • Offer to foot the bill for books, and start a weekly employee book club.
  • Create a mentorship program to encourage employees to invest in each others’ successes.
  • Stress group accomplishments over individual ones.

When workers begin to become friends with each other, you’ll find that teamwork is the natural result. With increased teamwork, your business will benefit from more engaged, productive and motivated workers.

This article is reprinted with permission of www.ExpressPersonnel.com. Contact Mr. Lars Nordin at Lars.Nordin@ExpressPersonnel.com if you would like to be added to their distribution list.

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Ever Feel You Avoid Confrontation?

There are times in business relationships when confrontation is required. We all have experienced events which brought out issues requiring management to react and we wondered why we procrastinated. Do not let the fear of the interaction keep you from making the right decision. If handled correctly, confronting issues early can be a positive event for you, any involved individuals and your business.

Here are some thoughts on this sensitive issue:

Conflict is constructive when it:

  • Opens up and clarifies important issues.
  • Leads to solutions of problems.
  • Increases individual’s commitment.
  • Leads to healthy communications.
  • Builds cohesiveness in a team.
  • Helps people grow personally and apply what they learned.

Conflict is destructive when it:

  • Diverts energy from more important activities and issues.
  • Polarizes groups.
  • Deepens differences in values.
  • Destroys morale.
  • Produces irresponsible and regrettable behavior.

How to confront situations constructively:

  • Do not react impulsively.
  • Be prepared; do your research.
  • Listen to the person’s point of view to clarify your understanding.
  • Paraphrase what is said so you clearly understand.
  • Come to your point quickly; state the purpose of the meeting and your intentions.
  • Be as specific as possible about undesirable behavior and required changes.
  • If necessary let the person know about consequences.
  • Insure understanding of your expectations.
Confronting problems early can bring you peace of mind.

This article is reprinted with permission of Mike Dunleavey, mikedunleavey@iib.ws, Executive Associate - Business Support Center - Retail Merchants Association.

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