Virginia set to begin series of minimum wage hikes
As we predicted in the January issue of Virginia Employment Law Letter, the Virginia General Assembly has increased the state’s minimum wage for the first time in 10 years and established a mechanism to raise it again in the coming years. Minimum wage workers in the state will see a substantial raise next year and in the years that follow—potentially more than doubling to $15 an hour by 2026. (This is an update to an article originally posted in May 2020.)
What are the increases?
The new Virginia law is fairly complicated in terms of its provisions increasing the minimum wage over time. Here’s the rundown:
- Beginning May 1, 2021, employees currently receiving the federal minimum wage of $7.25 will need to be paid $9.50 an hour, an increase of $2.25 per hour.
- After that, for every year until 2023, the minimum wage will increase automatically by $1.50 on the first day of the year.
- In 2023, the minimum wage will increase by only $1.00; and
- In 2024, there will be no increase at all.
The minimum wage also won’t increase in 2025 and 2026 unless there is a new General Assembly vote to authorize the hikes, which would be at the rate of $1.50 per hour.
If the legislature doesn’t authorize a wage increase, however, that doesn’t mean it won’t go up. Instead, beginning in 2027, a yearly adjusted minimum wage will be imposed, with increases based on the yearly rise in the Consumer Price Index (CPI). Even if the CPI falls, the adjustment cannot be less than zero.
Who is covered?