In March 2021, then-Governor Ralph Northam (D), backed by a full Democratic majority in the General Assembly (Virginia’s legislative body), signed the Virginia Overtime Wage Act, greatly expanding the State’s overtime requirements effective July 1, 2021. Prior to the Act, Virginia adopted the overtime requirements of the federal Fair Labor Standards Act (FLSA).
During the November 2021 elections, however, Republicans regained a 52-48 majority in the Virginia House of Delegates and a Republican Governor, Glenn Youngkin, was elected. Now, although the Senate remains under control of the Democrats by a three-member margin, Republican lawmakers in both houses are seeking to undo the Virginia Overtime Wage Act, via concurrent House Bill (HB) 1173 and Senate Bill (SB) 631.
The Virginia Overtime Wage Act
The Virginia Overtime Wage Act imposes several requirements that are not present under federal law. For example, although both the FLSA and the Virginia Overtime Wage Act generally obligate employers to pay one and one-half times an employee’s regular rate of pay for hours worked in excess of 40 in a workweek, the Virginia Overtime Wage Act defines the regular rate of pay as one-fortieth (0.025) of all wages paid for the workweek for employees who are salaried or paid on some other regular basis. This requirement may preclude employers from paying traditionally non-exempt employees a fixed salary to cover wages for hours in excess of 40 in a workweek (including on a fluctuating workweek basis), requiring instead an hourly rate calculation for overtime pay for even these employees in most circumstances.
The Virginia Overtime Wage Act further provides for a three year statute of limitations for bringing claims, rather than the two-year limitations period under the FLSA, the latter allowing for an additional year only if the employee can show that the employer’s actions were “willful.” The Act further precludes the “good faith” defense available under the FLSA, instead mandating that all violations are subject to double damages, or even treble (triple) damages for “knowing” violations. Lastly, the Act authorizes class or collective actions which, typically, are not authorized under Virginia law.
For more on the Virginia Overtime Wage Act, see Virginia Enacts Overtime Wage Law.
HB 1173 and SB 631
The concurrently-filed bills would eliminate all of these new requirements and instead return Virginia to the overtime law that existed prior to the Virginia Overtime Wage Act, that is, by express reference to the FLSA. How these bills will fare remains too close to call. Notably, seven House Democrats voted to pass HB 1173. If one Democratic Senator similarly broke ranks and voted to pass SB 631, a tie would be broken by the State’s Republican Lieutenant Governor, Winsome Sears.
Jackson Lewis will continue to monitor the bills and report any notable updates.
