Virginia Increases its Minimum Wage to $12.00 per Hour by 2023

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On April 22, 2020, during a special legislative session, the Virginia General Assembly voted to approve Governor Ralph Northam’s proposed amendment to a bill that will increase the Commonwealth’s minimum wage to $12.00 per hour by January 1, 2023.  While many business groups and Republican lawmakers opposed the increase, Virginia Democrats – who currently control both legislative chambers and the governorship (a government “trifecta”) – previously passed a hike to the state’s minimum wage during the regular legislative session that adjourned on March 12, 2020.  Rather than sign that bill, however, the governor requested an amendment delaying the effective date of the increase in recognition of the economic stresses caused by the COVID-19 crisis. With the legislature’s acceptance of that amendment, the bill automatically becomes law without further need of executive action. The resultant minimum wage hike will cause Virginia’s state minimum wage to surpass the federal minimum wage for the first time in the state’s history.

Under the new law, the minimum wage in Virginia will increase to $9.50 per hour effective May 1, 2021.  It will then rise to $11.00 per hour on January 1, 2022, before increasing to $12.00 per hour as of January 1, 2023.  The legislation includes provisions that could ultimately increase the state’s minimum wage to $15.00 per hour by 2026, but those provisions must be reenacted by the General Assembly prior to July 1, 2024 for that to occur.  If the General Assembly fails to reenact the provisions by the July 1, 2024 deadline, the minimum wage will continue to increase after January 1, 2025, but at a slower rate tied to inflation.  

The new law requires various state agencies to prepare a joint report addressing the feasibility and potential impact of instituting regional minimum wages throughout the Commonwealth, an approach to future minimum wage increases the Senate originally advocated. 

Virginia’s new minimum wage law also modifies the categories of individuals who are exempt from the state’s minimum wage requirements.  It allows employers to pay employees enrolled in an on-the-job training program less than the minimum wage for up to 90 days.  And it removes exempt status from a variety of individuals who were previously excluded from state minimum wage requirements, including home care providers, individuals with certain disabilities, piece workers, domestic service workers, and individuals younger than 18 who are under the jurisdiction and direction of a juvenile and domestic relations court.  Agricultural workers, temporary foreign workers, au pairs participating in a federal exchange visitor program, and students participating in a work-study program remain exempt from state minimum wage requirements under the new law.

This minimum wage hike represents just one in a number of progressive measures that Virginia Democratic lawmakers were able to pass during the General Assembly’s 2020 legislative session.  Virginia Democrats will continue to hold a trifecta at least through next year.  As such, employers should expect to see additional progressive employment legislation during the next Virginia General Assembly legislative session at the start of 2021 and should keep themselves informed of these developments.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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