Virginia presumes gig workers are employees rather than independent contractors unless proven otherwise using IRS guidelines, impacting benefits, taxes, and protections for platforms like Uber and DoorDash. This framework applies broadly to the gig economy, with workers able to sue for misclassification damages.
Classification Test
Virginia law under § 40.1-28.7:7 presumes any individual performing services for remuneration is an employee, shifting the burden to the hiring entity to rebut using IRS common law factors from 26 C.F.R. § 31.3121(d)-1. Key IRS factors include behavioral control (instructions, training), financial control (investment, unreimbursed expenses, profit opportunity), and relationship type (benefits, permanency, key services). Gig workers often qualify as employees if reliant on one platform, lacking independent business setup, or subject to platform rules on scheduling and acceptance.
Gig Economy Implications
Misclassified workers can recover lost wages, benefits, attorney fees, and costs via civil action against knowing employers. Platforms face penalties for wage/hour violations under § 40.1-29 if failing minimum wage or overtime for presumed employees. No Virginia-specific carve-outs exist for rideshare/delivery like in some states; federal DOL economic reality test may also apply, favoring employee status for dependent gig workers.
