One of the most important provisions for a subcontractor in any subcontract is a “pay if paid” clause. That clause, when used with the proper language, conditions payment by the general contractor to the subcontractor on payment by the owner to the general contractor. Last month, Virginia took steps to remedy this risk-shifting mechanism by amending current law to prohibit “pay if paid” clauses and impose new contract requirements on public and private jobs.

Federal contractors and subcontractors should be aware that the minimum wage for workers on many Federal contracts increases to $15 per hour on January 30, 2022 for new contracts (which includes renewals, extensions, and options).

On April 27th, 2021, President Biden issued an Executive Order raising the minimum wage to $15 per hour for all federal contractors. Contractors must incorporate the higher wage in new contract solicitations starting January 30th, 2022 and implement the new wage by March 30th, 2022.

As I previously wrote about, California had pushed to make Uber, Lyft and other app-based drivers employees, with all the attendant employee protections and benefits. However, California voters rejected the efforts and passed Proposition 22, which defines these drivers as independent contractors. It appears that Uber and Lyft are safe for now in California.

Uber and Lyft recently suffered another set-back in California as a result of an appeals court there upholding a preliminary injunction requiring them to classify their drivers as employees.

When an employee believes that he or she has not been paid wages due to him or her, one of the most important questions is who is the “employer” under the various federal, state, and local laws. The employee may have several “employers” under these laws and against whom he or she can impose liability - especially important if the corporate employer is insolvent.

A case from the Maryland Court of Special Appeals recently addressed this issue but so with a twist. The Court utilized the well-known “economic reality test” from the FLSA, but in the context of corporate veil piercing, which allows a court to disregard entity-level protections and impute liability to the business’s owners. Piercing the corporate veil is difficult in Maryland, and a court will only disregard the corporate entity to prevent fraud or for a paramount equity.