What Do I Do if My Business Is Accused of Wage Theft in Virginia?

 Posted on March 29, 2026 in Civil Litigation

If your business has been accused of wage theft in Virginia, you need to act quickly. It does not mean your business is automatically guilty. There are defenses available, and many wage claims arise from genuine disputes or misunderstandings rather than intentional wrongdoing.

The first and most important step is to contact an attorney who can help you understand what you are facing and how to respond. If you are dealing with a wage theft accusation in 2026, our McNair, VA business litigation lawyers are ready to help you protect your business.

What Is Wage Theft Under Virginia Law?

Wage theft is a broad term that covers any situation where an employer fails to pay a worker what they are legally owed. Under Virginia Code § 40.1-29, employers are required to pay employees all wages owed in full and on time. The law also limits what employers can legally deduct from a paycheck.

Common situations that lead to wage theft accusations include:

• Failing to pay overtime for hours worked beyond 40 in a workweek
• Making deductions from pay that the law does not allow
• Not paying a worker for all the hours they actually worked
• Failing to pay a final paycheck after an employee leaves
• Misclassifying an employee as an independent contractor to avoid paying benefits and overtime

Some of these situations are intentional. Many are not. Payroll errors, misunderstandings about job classifications, and disagreements over how compensation was structured can all result in claims that look like wage theft, even when no one meant to break the law.

What Are the Penalties if Your Business Is Found Guilty of Wage Theft?

If a court finds that your business failed to pay wages, it can order you to pay the full amount owed plus an equal amount in liquidated damages. That means even a modest underpayment can cost double.

If the court finds that your business knowingly failed to pay wages, the damages triple. The employee can also recover attorney's fees and costs. On top of that, a civil penalty of up to $1,000 per violation can be imposed. In cases involving willful nonpayment, there may also be criminal charges. Unpaid wages under $10,000 can result in a Class 1 misdemeanor. Unpaid wages of $10,000 or more can be charged as a Class 6 felony.

Employees can also bring collective actions, meaning a single claim can quickly grow into a group lawsuit involving multiple workers at once.

What Defenses Are Available to Your Business For a Wage Theft Case in VA?

Being accused of wage theft does not mean your business is guilty. Several defenses may apply depending on the facts of your situation.

Bona Fide Dispute

A bona fide dispute is one of the most important defenses under Virginia law. If there was a genuine disagreement between you and the employee about the amount of wages owed, that dispute can be a defense against the most serious penalties, particularly the criminal provisions. The dispute has to be real and in good faith. It cannot be manufactured after the fact.

Proper Classification of Workers

Proper classification of workers is another area to examine. If the worker was legitimately an independent contractor under applicable legal standards, the wage laws that cover employees may not apply. Virginia law now presumes worker status unless the employer can prove otherwise, so this argument requires solid documentation.

Accurate Records

If your payroll records clearly show that the employee was paid correctly and in full for all hours worked, those records directly challenge the claim. This is why good recordkeeping is so important even before a dispute arises.

Untimely Claim

Finally, if the employee's claim is untimely, that is another potential defense. Employees generally have three years to bring a wage claim under Virginia law. If the claim involves wages from beyond that window, the time limit may bar part or all of the claim.

What Can You Do Going Forward To Protect Your Business From Wage Theft Accusations?

Whether or not the current claim has merit, a wage accusation is a signal to review how your business handles pay. Some steps that reduce your legal exposure going forward include:

• Conducting regular payroll audits
• Keeping detailed timekeeping records for all hourly workers
• Making sure employment agreements clearly spell out how compensation is calculated
• Reviewing how workers are classified to make sure contractors truly meet the legal standard

Prevention is always less expensive than litigation. Businesses that take compliance seriously are far less likely to face these claims in the first place.

Contact Our Tysons, VA Claim Defense Attorneys Today

At Salvado Law Offices, we are fully prepared and committed to taking on your case with diligence and attentiveness. Attorney Carlos Salvado is a frequent guest at Agendo Radio, where he serves as a voice and advocate for the Hispanic community, commenting on and responding to questions about local and national issues affecting Latin Americans and immigrants. That commitment to the community extends to every client he represents. The McNair, VA business litigation lawyers at Salvado Law Offices will work hard to protect your business and your reputation. Call 301-933-1814 today to get started.

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