Understanding DC and Virginia Minimum Wage

Under federal Dc and Virginia minimum wage guidelines, most employers must pay non-exempt employees at least $7.25 per hour. However, some states mandate a higher minimum wage, and the higher of the two rates control payroll. For example, Washington D.C. has the highest minimum wage in the county at $14 per hour, while federal minimum wage laws currently apply in Virginia. As such, minimum-wage employees in the Capitol make nearly twice as much as workers across the Potomac.

Countless employers headquartered in Northern Virginia conduct substantial business in D.C., leaving many Commonwealth employees working across state borders resentful of this pay disparity. The Governor of Virginia signed S.B. 7 into law on April 22, 2020, which gradually increases the minimum wage in Virginia to $15 over the next seven years. Discuss how these changes apply to your rights in the Commonwealth by speaking with the experienced Virginia and D.C. wage and labor lawyers at McClanahan Powers, PLLC. Call our Vienna, Virginia office today at (703) 520-1326 or contact us online.

Overview of 2021 Anticipated Changes to Minimum Wage in Virginia

Until May 1, 2021, the federal minimum wage still applies in the Commonwealth. The Governor delayed the expected January 1, 2021 increase in light of the COVID-19 pandemic. This delay gives employers additional time to adjust to the following periodic escalations to minimum wage:

  • On May 1, 2021, the minimum wage increases to $9.50 per hour
  • On January 1, 2022, the minimum wage increases to $11 per hour
  • On January 1, 2023, the minimum wage increases to $12 per hour
  • On January 1, 2025, the minimum wage increases to $13.50 (subject to legislative review)
  • On January 1, 2026, the minimum wage increases to $15 per hour (subject to legislative review)
  • After January 1, 2027, employers must pay the adjusted minimum wage set by the commissioner considering current economic trends

Federal overtime laws still apply to these new rates, which increase to $14.25 per hour on May 1, 2021. In addition, trainees must also receive 75 percent of the applicable minimum wage or federal minimum wage during training, which may not exceed 90 days. These changes signify a monumental shift in how some Virginia businesses have operated. Speak with a Virginia legal professional promptly to discuss implementing these minimum wage increases into your business plan.

Previously Exempt Workers Now Eligible from Minimum Wage in the Commonwealth

In addition to these anticipated wage hikes, S.B 7 eliminated specific categories of employees previously exempt from Virginia minimum wage requirements. Many domestic workers, caregivers, disabled persons, state wards, and persons previously paid on a quota now qualify for minimum wage. Home care providers expressly qualify as employees in most cases. These include home health providers, traveling nurses and health aides, or those assisting elderly or disabled persons with daily activities such as cleaning, cooking, and shopping.

Regardless of these changes, minimum wage requirements do not apply to independent contractors. Businesses might still contract with certain service providers on a flat-fee or project basis. The worker must legally qualify as an independent contractor regardless of his title. Independent contractors generally provide their equipment, control their performance, and set their hours and rates. Legal principles found in traditional case law still govern this distinction in the Commonwealth. You should speak with a qualified Virginia business attorney to ensure compliance with Virginia and federal labor law.

Employees Still Exempt from Minimum Wage in Virginia

Even if workers qualify as employees in the Commonwealth, employers do not have to pay minimum wage to the following categories of employees:

  • Farmhands and farm laborers
  • Golf caddies
  • Nonprofit and charitable volunteers
  • Taxi drivers
  • Commission-based traveling salespersons
  • Anyone under the age of 16 in so far as he/she is legally employed
  • Summer camp employees
  • Students enrolled in work-study type programs
  • Temporary foreign workers, au pairs, and other employees exempt under federal law
  • Prisoners

Babysitters who work more than 10 hours per week qualify for minimum wage in Virginia. Tipped employees are not directly exempt, but employers might only need to distinguish between tips received and the applicable minimum wage. Specific laws govern each of these exemptions, and employers should not rely on a stated exception without speaking with a qualified Virginia payroll lawyer. Both federal and state wage and labor violations carry hefty financial penalties.

How Do Minimum Wage Laws Apply to Cross-Border Employees?

Commonwealth residents working in both Virginia and D.C. may wonder what laws govern their hourly pay rate. The minimum wage in D.C. will increase to $15 as of July 1, 2021. D.C. Law § 32-1003 dictates that this wage governs if an employee (1) regularly spends more than 50 percent of her working time in D.C. or (2) works for a D.C-based employer spends a lot of time in D.C., and does not spend more than 50 percent of her time working in another state. In such cases, the D.C. minimum wage applies to all hours worked.

Virginia employers must permit or require work from another jurisdiction for that state’s laws to apply. Further, the rules in the state where a remote employee works usually govern minimum wage. However, employees working remotely based on an executive order may be subject to certain exemptions. Further, applicable laws could change depending on the pay period. Workers regularly employed in the Washington metropolitan region should speak with a dedicated Virginia and D.C. wage and labor attorney at McClanahan Powers, PLLC, to discuss the applicable minimum wage.

Review and Prepare for Minimum Wage Increases & Changes

If you have employees working in Virginia or D.C., even those previously exempt from state minimum wage requirements, contact McClanahan Powers, PLLC‘s Virginia office. Employers offering telework due to COVID-19 closures should further address potential conflicts in state and federal minimum wage laws with us. Federal, Virginia, and D.C. labor laws penalize employers for payroll violations regardless of intent. Contact our Washington metropolitan area attorneys by calling (703) 520-1326 or contacting us online today.

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