May 2022: Virginia Governor Realigns Overtime Requirement with Federal FLSA

Update Applicable to:
All employers in the state of Virginia

What happened?
On April 11, 2022, Governor Youngkin signed House Bill 1173 (HB 1173) into law, which will amend the Virginia Overtime Wage Act (VOWA) and reverse the overtime standards back to the federal standards.

What are the details?
On July 1, 2021, the VOWA went into effect, significantly deviating the state’s overtime pay laws from its long-standing reliance on the standards set forth in the federal Fair Labor Standards Act (FLSA).

As a result of HB 1173, Virginia will return to the overtime standards under the FLSA. HB 1173 provides that any employer who violates the state’s overtime pay requirements “shall be liable to the employee for the applicable remedies, damages, or other relief available under the FLSA.”

Although Virginia’s recent overtime amendments largely align its overtime obligations with the federal FLSA, employers should be aware of certain differences. 

• First, the new amendments preserve employees’ private right of action under the state’s 2020 amendments to the Wage Payment Act, Va. Code § 40.1-29, which granted employees access to state courts to bring their individual or collective action claims for unpaid wages, including overtime.  This avenue is in addition to employees’ private right of action under the FLSA. 
• Similarly, damages for overtime violations in Virginia are not necessarily limited to those available under the FLSA.  The heightened damages and penalties authorized under the Wage Payment Act remain viable for overtime violations in the Commonwealth. This includes automatically liquidated damages equal to the amount of unpaid wages and prejudgment interest at 8% per year, as well as the possibility of civil penalties of $1,000 for each violation and treble damages for “knowing” violations.
• Unpaid overtime claims pursued under the Virginia Wage Payment Act can be commenced within three years (see Va. Code § 40.1-29(L)), as opposed to the normal two years under the FLSA (except in the case of a “willful” violation, where the FLSA similarly provides a three-year limitation period).
• Finally, the VOWA amendments disallow the exemption for derivative carriers, available under the FLSA, in the Commonwealth.  A “derivative carrier” is a subsidiary or affiliate of an air carrier, within the meaning of Title II of the Railway Labor Act, that enjoys common ownership or control with the parent and whose employees perform work traditionally performed by airline employees.  

HB 1173 will go into effect on July 1, 2022.

For more information, please see the links below:

House Bill 1173 (HB 1173)

Fair Labor Standards Act (FLSA)

Virginia Overtime Wage Act (VOWA)

Article 1 – Article 2

What do employers need to do?
Employers should review the links provided above and prepare to make immediate changes to their overtime policies to comply with the FLSA. However, employers should also be aware that some rules from VOWA still apply.