Subcontractor Pleads Guilty to Felony Worker Misclassification

RICHMOND (December 8, 2021) – Richmond Drywall Installers Inc., a subcontractor that has been working on the new General Assembly Building, has pleaded guilty to felony embezzlement charges based on worker misclassification brought by Attorney General Mark R. Herring’s Worker Protection Unit, following an investigation by the Office of the State Inspector General. In October, Attorney General Herring’s Worker Protection Unit brought the first worker misclassification-related charges against the subcontractor for allegedly misclassifying their employees as independent contractors to avoid paying state taxes. As part of the plea agreements, Richmond Drywall Installers Constructors Inc. will pay a total of $21,000 in fines and restitution.

“Businesses that take advantage of their workers through misclassification, wage theft, or payroll fraud are not only stealing from their hardworking employees, but they are also stealing from the Commonwealth,” said Attorney General Herring. “I am committed to rooting out worker exploitation in Virginia and protecting our workers from abuse and mistreatment by their bosses. I want to thank both my Worker Protection Unit for their hard work, as well as our partners over at the State Inspector General’s office for their help on investigating this important case.”

In Richmond City Circuit Court today, Richmond Drywall Installers Constructors Inc. pleaded guilty to five felony embezzlement counts and were ordered to pay a $2,500 fine for each of the five counts and $8,500 in restitution.

“It is the first time worker misclassification charges were brought by the OAG’s new Worker Protection Unit, and I am proud that our special agents were part of the investigation that brought this issue to the forefront,” said State Inspector General Michael C. Westfall.

These were the first worker misclassification-related charges brought by Attorney General Herring’s Worker Protection Unit since its creation earlier this year. Worker misclassification – one of the most common forms of worker exploitation – involves falsely identifying individuals as “independent contractors” when they are really employees. This allows employers to avoid paying unemployment and other taxes on workers and to avoid the costs of covering the employees with workers’ compensation and unemployment insurances, and it has been consistently shown to drive down the wages of other workers.