Month: October 2014

Vandeventer Black Labor & Employment Law Seminar: November 18, 2014, Sheraton Norfolk Waterside Hotel

The Labor & Employment group of our firm is pleased to announce its 29th annual Labor & Employment Law Review and Update! The seminar will be held on November 18, 2014 at the Sheraton Norfolk Waterside Hotel from

8:30 a.m. to 4:00 p.m. Topics Include: Recent Developments in Labor & Employment Law • Affordable Care Act Updates • Managing Employee Leave • Workers’ Compensation Tips • Hiring & Firing • New Requirements for Government Contractors. Please share the attached flyer with your clients.

Individuals can register online by November 10, 2014. The cost for the seminar is $175 per person. This includes the course materials, breakfast, lunch, and valet parking. Additional attendees from the same organization may attend for $160 per person.

Vandeventer Black’s Labor & Employment team represents a wide variety of organizations and businesses in labor and employment law and litigation matters, including discrimination claims, union avoidance, NLRB charges, wrongful discharge, breach of contract suits, trade secret/unfair competition suits, wage and hour, employee benefits, workers’ compensation defense, immigration, and employee relations counseling and training.

2014 Carter Gunn Memorial Stressbuster 8K – 27 Nov

Make your reservations now for the 2014 Carter Gunn Memorial Stressbuster 8K fun fun. This year the Stressbuster 8K is November 22, 2014 at First Landing State Park, Virginia Beach, VA. Registration starts at 7:30am; the race starts at 9:00am.

This is a fun, cross country 8K race along historic, scenic and rolling trails in First Landing State Park. The race is Chronotrack B-tag Timed.

All proceeds go to the Carter T. Gunn Fund, which is part of the Vandeventer Black Foundation. The Carter T. Gunn Fund is dedicated to fighting depression and educating the public about mental health.

 

Mechanic’s Liens: Part One. Technical Risks

Virginia law provides for a mechanic lien intended to insure payment to persons who supply labor or materials for construction projects. On first blush, the requirement is simple – to file the mechanic’s lien. But over the years judicial interpretations of the statutory provisions have made the requirements much more complex than that; and any disregard of the technicalities can defeat payment.

One example is the recent case involving Heads Up Sprinkler Systems. Heads Up filed a mechanic’s lien to secure payment of $134,390 for work it performed on a subdivision known as “Ashville Park” in Virginia Beach, Virginia. When Heads Up went to enforce its mechanic’s lien in court, one of the parties – the lender who was also owed monies and so trying to defeat the lien claim – raised as a defense to the mechanic’s lien that Heads Up had not included the statement in its mechanic’s lien that it intended “to claim the benefit of this mechanic’s lien.”

While it would seem obvious that anyone filing a mechanic’s lien was intending to claim its benefit, there is language in the Virginia Code requiring that statement to be included in the memorandum of lien. Applying prior Virginia Supreme Court decisions that the mechanic’s lien requirements must be “strictly” complied with, the judge held that Heads Up’s mechanic’s lien was invalid because it did not include that statement, and dismissed the lien claim; and so left Heads Up with no security to receive payment for its work after a five year battle for payment.

There are many other similar technical requirements that apply to Virginia mechanic’s liens. So while a mechanic’s lien that meets all of the necessary requirements can be an excellent means of insuring payment, those technical requirements create pitfalls for the unwary. Because of that, the assistance of experienced mechanic’s lien counsel is particularly beneficial.

Please click here to read Part 2: Practical Risks.

Mechanic’s Liens: Part Two. Practical Risks

A mechanic’s lien is a powerful tool to secure payment for construction work.  As discussed in the last article, however, there are technical requirements to prepare a mechanic’s lien.  Heads Up Sprinkler lost its mechanic’s lien after five years because it failed to include a statement that it “intended to claim the benefit of the lien.”  Unfortunately, Heads Up also faced practical issues trying to enforce its lien.

Heads Up filed an appeal of the lower court’s decision finding that the lien was invalid.  The Supreme Court of Virginia, however, found that the lower court’s decision releasing the lien was an “interlocutory” order and not subject to appeal until the final decision in the lawsuit, including the decision on Heads Up’s breach of contract claims.  Eventually, Heads Up was involved in two appeals relating to the enforceability of its mechanic’s lien.  Almost six years after filing its lien, Heads Up lost both appeals and has no security for its claim.

This case illustrates the practical problems with trying to enforce a defective mechanic’s lien.  The filing of a defective mechanic’s lien can lead to increased legal costs fighting over the validity of the lien instead of focusing on paying the debt owed to the contractor.  Unfortunately, a contractor cannot recover its attorney’s fees as part of its lien claim even if it prevails on these issues, but those legal fees can become significant if the owner or the mortgage lender contest the lien.

To protect their rights for payment, contractors need to prepare accurate and enforceable mechanic’s liens.  A valid lien provides security for the claim and puts the mechanic’s lien claimant in a better negotiating position than other contractors.  A defective lien, however, can result in delays and additional legal costs.  All contractors should consult with an attorney experienced in preparing and enforcing mechanic’s liens to

Please click here to go back to Part 1: Technical Risks.

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Civil Penalty Increased for Noncompliance with Virginia Workers’ Compensation Insurance Laws

Uninsured employers shall be assessed a civil penalty, subject to a maximum of $250 per day of noncompliance and subject to a maximum civil penalty of $50,000.

The 2014 General Assembly approved an increase in the civil penalty imposed when an employer required to insure under the Workers’ Compensation Act fails to insure. The law change amended section 65.2-805 of the Workers’ Compensation Act, which previously imposed which a civil penalty of at least $500 and up to $5,000 for each period of being uninsured. The new provision provides that employers shall be assessed a civil penalty of not more than $250 per day for each day of noncompliance, subject to a maximum penalty of $50,000, plus collection costs, which constitutes a significant increase in the potential penalty. The amendment was approved March 7, 2014 and became effective on July 1, 2014.

Workers’ compensation coverage requirements are complex, but focus on the number of employees. Employers in Virginia are required to insure when they regularly employ three or more employees. It is important to be aware that an “employee” is defined broadly under the Act and includes every person in the service of another under any contract of hire, written or implied. “Employee” includes statutory employees (subcontractor’s employees), corporate officers, minors, undocumented workers, working family members, apprentices, temporary and seasonal employees. A business that doesn’t count all of its employees may not realize it is required to carry coverage.

Employers should also be aware, designating a worker as an “independent contractor” does not necessarily mean they are not an employee. Workers’ compensation looks to whether the business exerts control over the manner and means of how the work is performed. In the event of a claim, the facts of the work circumstances will determine if the individual is covered for workers’ compensation, regardless of payment on a 1099 designation.

Please contact an attorney or the Virginia Workers’ Compensation Commission to check your coverage and avoid coverage gaps. Uninsured employers and new businesses are urged to familiarize themselves with workers’ compensation insurance coverage requirements, obtain coverage when required, be compliant and avoid a penalty. Workers’ compensation is mandatory coverage. It is required by state law, and no other form of insurance may substitute. Failure to have coverage due to lack of knowledge is not a valid excuse for failure to insure.

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