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What is Virginia’s Minimum Wage?

With so many changes coming to businesses this year (see more changes coming soon), an important question to ask is “What is Virginia’s minimum wage?” On May 1, 2021, Virginia’s minimum wage increased from $7.25 to $9.50. Though this is Virginia’s first change to the minimum wage in over a decade, it won’t be the last time you ask “what is Virginia’s minimum wage. In fact, prepare for changes each year now. Additional increases are already scheduled for 2022 and 2023.

Due to a shortage of labor across many industries, several Virginia business owners are already offering more than the minimum wage in order to attract employees. And some of you may already have prepared for this first increase because you thought it was going to take effect back on January 1, which is when the original law was scheduled to take effect. But lawmakers delayed the start date by four months to relieve pressure on Virginia businesses and to give them a bit more time to recover from last year’s coronavirus shutdown.

After going up to $9.50 on May 1, 2021, Virginia’s minimum wage will increase again to $11.00 on January 1, 2022, and then to $12.00 on January 1, 2023. After that, it is supposed to increase to $13.50 on January 1, 2025 and even further to $15.00 on January 1, 2026, but the General Assembly still has some work to do before the last two increases will be set in stone. We will know more about that in December 2023. And starting in 2027, Virginia’s minimum wage will be adjusted to reflect increases in the consumer price index.

Virginia’s Minimum Wage Penalties

Business owners who fail to comply with the increased minimum wage risk lawsuits, penalties, and fines. Under the new law, an employee is entitled to bring an unpaid wage claim, which means he/she can recover the unpaid wages in addition to 8% interest from the date the wages were due. The business may also end up having to pay the employer’s attorney’s fees and/or liquidated damages of up to three times the amount due. Lastly, the business may be hit with a fine ranging from $10 to $200.

If you are involved in construction, note that the new law creates an employment relationship between a general contractor and his/her subcontractor’s employees. General contractors, this means that you may be held liable if your sub fails to pay his/her employees! If you have not had an attorney recently review your subcontracting agreements, please contact Dunlap Law for assistance with this new issue.

Exceptions To Virginia’s Minimum Wage

A few categories of employees remain exempt from the minimum wage increase. Tipped employees, for example, will continue to follow the state minimum cash wage – currently $2.13 an hour – pursuant to the federal Fair Labor Standards Act (FLSA). A tipped employee is anyone who receives more than $30.00 in tips per month. Agricultural employees are also excluded, as are temporary foreign workers.

There is also a “training wage” exception for employees enrolled in on-the-job training for less than 90 days. Businesses are only required to pay those employees 75% of the minimum wage.

Need More Help Concerning Virginia’s Minimum Wage?

Whether you are worried about the new minimum wage law or are already offering more than $9.50 an hour to your employees, Dunlap Law can help you and your business understand and manage all of the recent changes to the employment law landscape.

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