Virginia has changed the statutory language defining which jobs incentive recipients may count under its major economic development incentive programs. Companies may now include telework positions held by Virginia residents to comply with their incentive performance agreements.
The statute specifies that the teleworking positions must be held by Virginia residents employed by the recipient company or its affiliates. Virginia may require that recipients share payroll reports that have been provided to the Virginia Employment Commission so that the Commonwealth can verify employment status.
Incentive programs to which the telework provisions apply are:
- Commonwealth’s Development Opportunity Fund (COF)
- Major Eligible Employer Grant Program
- Virginia Economic Development Incentive Grant (VEDIG)
- Virginia Jobs Investment Program (VJIP)
- Virginia Talent Accelerator Program
- New Company Incentive Program
- Data Center Retail Sales & Use Tax Exemption
Johan Salén, VP Incentives for the Virginia Economic Development Partnership (VEDP), said in a recent presentation that this new provision has been very helpful to VEDP’s business outreach and promotion efforts. While the statute changed last year prior to the COVID-19 outbreak, it has been timely as businesses have expanded their remote workforce and implemented work-from-home policies.
The incentive language recognizes the changing nature of work. Employees may not always be located in one place or in one building. Office space is expected to continue to shrink but not go away. As this happens, one hope is that more people will choose to live around the state, spreading the economic benefits of new projects beyond a specific site.
On the other hand, the state will not encourage or actively promote “job poaching within Virginia,” so communities should not strive to recruit Virginia workers from other locations. Communities may not know if they are beneficiaries of this policy since the incentive is connected to the place where the paycheck is issued. Information about exactly where in Virginia the teleworkers are located will not be collected. It is also important to note that since the benefits are limited to Virginia residents, companies whose employees live in surrounding states will still not be able to count those workers under their performance agreements.
For more information on telework incentives, visit https://www.vedp.org/incentives and scroll to the bottom of the page. Virginia Economic Developers Association (VEDA) members can also access additional information on this initiative and other important topics from the excellent impactED series of programs presented by VEDA and VEDP.