Virginia Minimum Wage Increase Takes Effect on May 1, 2021

Posted on by David F. Dabbs in Employment Law

Virginia employers should be aware that the state-mandated minimum wage will increase to $9.50/hour effective for hours worked on and after May 1, 2021.

This increase to $9.50/hour was originally passed by the General Assembly to take effect on January 1, 2021, but was thereafter amended by Governor Northam (and that amendment was approved by the legislature) to delay this increase to May 1 in light of COVID-19. Further increases are scheduled to $11/hour on January 1, 2022, and $12/hour on January 1, 2023. Increases thereafter to $13.50 and $15 will follow only if re-enacted by the General Assembly in 2024 and 2025.

Before being amended in 2020 to impose these pending increases, the Virginia Minimum Wage Act (MWA) had for many years been important only in rare cases, in part because the mandated wage was less than or merely equal to the federal minimum wage imposed by the federal Fair Labor Standards Act (FLSA).

As amended, the Virginia MWA also now provides for annual indexing of the minimum wage for inflation, beginning in 2027.

Available exemptions under the Virginia MWA differ from those under the FLSA. Certain prior exemptions to the Virginia MWA have also been eliminated -- for domestic workers, pieceworkers, certain disabled workers, and businesses with fewer than four employees. Tipped employees, defined at those receiving more than $30 a month in tips, continue to be eligible for a “tip credit” towards minimum wage in the amount of tips received, subject to an FLSA minimum cash wage of $2.13/hour, but must now generally receive a total of at least $9.50/hour.

Additional information is available online from the Department of Labor and Industry here.

About the Author

David F. Dabbs advises and represents employers on all aspects of employment law, including applications, contracts, deferred compensation plans, handbooks, policies, terminations, releases, and restrictive covenants.

Spotts Fain publications are provided as an educational service and are not meant to be and should not be construed as legal advice. Readers with particular needs on specific issues should retain the services of competent counsel.