Important Virginia Labor Law Updates

INFINITI HR is happy to provide Monthly State Law Updates as a service to our subscribers. These briefs provide a general description and are not meant to be all inclusive of compliance requirements. This list is not inclusive of all legislative changes for employers across the U.S. Changes may have been addressed in previous updates, which can be accessed from our blog.

This list is not inclusive of all legislative changes for employers across the U.S. Other changes may have been addressed in previous updates, which can be accessed online on our partner website inspiringhr.com.

Employers are encouraged to work with their Inspiring HR Consultant before making policy changes to capture the full requirements of these laws.

Inspiring HR was busy in the first quarter of the year bringing our clients up to date on, and preparing for, a number of important Virginia Labor Law changes, as follows:

2021 VIRGINIA EMPLOYMENT LAW UPDATE

Virginia Minimum Wage

Effective May 1, 2021, the hourly minimum wage will increase to $9.50. Future increases are scheduled as follows:

January 1, 2022 – $11.00 per hour

January 1, 2023 – $12.00 per hour

The increases to $13.50 on January 1, 2025, and $15.00 on January 1, 2026, will need to be approved by the General Assembly’s by July 1, 2024 to become effective as scheduled.

We recommend you review all non-exempt employee’s pay rates and ensure all meet or exceed the minimum. Raising the pay rates to the minimum may warrant adjustments to the pay rates of higher paid employees, to prevent wage compression.

Virginia Overtime Wage Act

Effective July 1, 2021, Virginia employers will need to modify how they calculate overtime rates for non-exempt employees. Currently, under the Fair Labor Standards Act (FLSA), an employee’s regular rate of pay is the sum of all earnings (including production or quality bonus, commissions, incentives, etc.) divided by total hours worked in a workweek. Overtime is then calculated as 1.5 times that regular rate. This calculation remains the same for hourly employees.

For salaried non-exempt employees, the regular rate of pay will be calculated as one-fortieth (.025) of the sum of all earnings (including production or quality bonus, commissions, incentives, etc.) in the workweek (see example below). Overtime is then calculated as 1.5 times that regular rate. The practical impact of this change is to bar employers from utilizing the FLSA’s “fluctuating work week method” or other straight time methods for calculating wages for non-exempt employees.

The new law also authorizes collective actions “consistent with the collective action procedures of the Fair Labor Standards Act” for violations and extends the statute of limitation to up to three years. The net effect is to create the potential for significant liability to employers who fail to properly classify and compensate their employees.

Salaried Nonexempt OT Calculation Example:

Let’s say a nonexempt employee is paid $500 a week salary and receives a $50 performance bonus for that week.

$500   +   $50   =    $550 Total earnings

$550/40 = $13.75 regular rate of pay

13.75 x 1.5 = $20.63 overtime rate of pay

If the employee worked 45 hours in this work week, they would receive $103.15 in overtime ($20.63 x 5 hours) in addition to the $550 of earnings for their straight time hours of work.

We recommend you contact your payroll provider to ensure they are aware of this change and discuss how to implement the new OT calculation method for your salaried non-exempt employees. Because the hours worked in a week are critical to a proper overtime calculation, we encourage you to ensure that all non-exempt employees, whether hourly or salaried, clock in and out of work (including time worked offsite) if they had not previously done so.

Marijuana Legalization

Effective July 1, 2021, Virginians 21 and over can possess up to one ounce of cannabis for private consumption. While this isn’t an employment regulation, it does have the potential to impact your workplace.

We recommend:

• Make it clear that you don’t tolerate possession or use/impairment on the job, just as you wouldn’t tolerate alcohol use.
• Train managers to spot signs of impairment and what to do with positive marijuana test results.
• Review your Drug Testing Policy, and the form of testing your company uses, with special attention to pre-employment and random testing. Stay on top of developments in the technology of testing.

Paid Sick Leave for Home Health Care Workers

Finally, also effective July 1, 2021, home health workers averaging at least 20 hours per week or 90 hours per month must be provided with paid sick leave. Home health workers are individuals who provide personal care, respite, or companion services to an individual who receives consumer-directed services under the state plan for medical assistance services (Medicaid).

If you have any employees who meet this definition, they must earn at least one hour of paid sick leave for every 30 hours worked, up to a cap of 40 hours a year.

We recommend businesses employing home healthcare workers review their current leave policies for alignment with this new paid sick leave requirement. If current policies do not provide sufficient leave for similar uses identified in the law, employers should create a new policy and share it with employees.

In Summary

We know this is a lot of information, but we are here to help! Contact your HR Consultant for assistance, or contact us.

Interested in other current employment trends? Click the link to view the recent blog: Dear Small Business: Is Your Hiring Strategy Out of Date? or check back for more on human resources, payroll, insurance, and benefits.

This article does not constitute legal advice and there are subtle variations in employment law as it pertains to this topic, depending on where your business operates. It is strongly suggested that you seek consultation or legal counsel before making decisions about policies.