Virginia Passes Overtime Legislation
Update Applicable to:
All employers operating within Virginia.
On March 30, 2021, Governor Northam signed into law the Virginia Overtime Wage Act (HB 2063).
What are the details?
For employees paid on an hourly basis, the regular rate will be the employee’s hourly rate in addition to other wages paid or allocated to that workweek, minus any applicable federal exclusions, divided by the total number of hours worked in that workweek. For Virginia employees paid on a salary or other regular basis, however, the regular rate will be calculated as “one-fortieth of all wages paid for that workweek.” This new standard appears to preclude employers from paying non-exempt employees a fixed salary that covers straight-time wages for hours in excess of 40 hours in a workweek, or from utilizing the “fluctuating workweek” method of calculating overtime under the FLSA, and will require the use of a higher hourly rate for calculating overtime liability for non-exempt salaried employees in many situations.
An article covering the ramifications of this calculation change, including an example, can be found here.
What do employers need to do?
Virginia employers should update their payroll practices, to ensure that they are paying employees, especially salaried non-exempt, the correct amount of overtime pay.