Employment Law Alert - Virginia's New Minimum Wage

Barring any last-minute gubernatorial intervention, Virginia’s minimum wage will rise to $9.50 per hour on May 1, 2021. Employers, especially small businesses, should prepare now for the anticipated increase.

In 2020, the General Assembly passed legislation that amended Virginia Code §§ 40.1-28.9 and 40.1-28.10 to raise the minimum wage to $15.00 per hour in stages and to eliminate minimum wage exemptions. This year’s increase to $9.50 an hour follows a gradual and scheduled approach to $15.00 per hour by 2026.

Pursuant to the amended Virginia Code § 40.1-28.10, the scheduled new hourly amounts are as follows:

Effective May 1, 2021: $9.50
Effective January 1, 2022: $11.00
Effective January 1, 2023: $12.00
*Effective January 1, 2025: $13.50; and
*Effective January 1, 2026: $15.00

Tipped wages continue to follow the state minimum cash wage payment under the federal Fair Labor Standards Act at $2.13 per hour. However, “tipped employees” are defined in the amended code section as employees who regularly receive over $30.00 per month in tips.

The 2020 legislation also directed three Virginia agencies to conduct a joint review of both the feasibility and the potential impact of instituting a regional minimum wage.

This year, House Bill 2270 (2021) was introduced to further delay the increase to $9.50 per hour on May 1, but was defeated in committee. Any legislative intervention through the budgetary process remains unlikely at this point.

Kaufman & Canoles stands ready to assist in any legal matters you may have pertaining to the anticipated minimum wage increase. Our firm will continue to monitor the situation and will provide more information as it becomes available.

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*The General Assembly in 2024 would have to re-enact, or essentially confirm by legislation, the increases to $13.50 and $15.00 per hour for the years 2025 and 2026.