The new minimum wage in Virginia increases to $12 on Jan. 1, 2023. Unlike other states, Virginia does not exempt tipped workers from the state mandated minimum wage. Tipped employees (those who regularly receive more than $30.00 a month in tips) may be paid at the tipped minimum wage of $2.13 per hour. However, an employee’s hourly wages plus tips must meet the Virginia minimum wage rate of $12.00 per hour. If they do not, an employer must pay the difference to an employee so that they earn at least $12.00 per hour.
The state of Virginia has a long list of employees who are exempt from the state minimum wage. Some employees who are exempt from this minimum wage rate include:
- Full-time students who put in fewer than 20 hours of work per week when school is in session
- Babysitters who work for fewer than 10 hours per week
- Individuals under the age of 18 employed by a parent or guardian
- Employees of children summer camps
- Any person under the age of 16, regardless of employer
Virginia’s state minimum wage is set to gradually increase each year, until it reaches $15 starting January 1, 2026. It will then be $15 per hour for workers whose employment is covered by the federal Fair Labor Standards Act (FLSA) and to public employees.
With changes to the minimum wage on the horizon, you should prepare. Here are a few options you may consider during the Virginia minimum wage increase:
- Audit your expenses: Check your cash flow in detail and create a hiring plan you can afford. In some cases, you may find that hiring temporary workers as needed is less expensive than taking on full-time regular staff.
- Make sure you hire and keep the right employees: Replacing an employee can cost a lot. You can decrease the total cost associated with recruiting and training when you hire (and then retain) the right people. Look for candidates with good track records, who come recommended, and who fit in with the company culture. Once the employee is onboarded, make sure you build a relationship and provide paths for employee growth; it makes it more likely that they will stay in their role.
Virginia’s minimum wage law stipulates that the increases to $13.50 and $15.00, scheduled to occur in 2025 and 2026, must be reauthorized by the legislature by July 1, 2024. If they are not reauthorized, the annual indexing provisions will take effect from the $12.00 minimum wage level established on January 1, 2023.
For more information regarding Virginias minimum wage, please go to the following links:
Article 1.1. Virginia Minimum Wage Act https://law.lis.virginia.gov/vacodefull/title40.1/chapter3/article1.1/
EPI Minimum Wage Tracker https://www.epi.org/minimum-wage-tracker/#/min_wage/Virginia
Virginia Minimum Wage Increases: Everything You Need to Know in 2022. (2021, November 5). Square. https://squareup.com/us/en/townsquare/guide-to-virginia-minimum-wage