Category Archives: Minimum Wage

Virginia Minimum Wage Law: Status Update March 2024

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Virginia Governor Glenn Youngkin has vetoed Virginia’s latest proposed minimum wage increase. The subject bill, which had passed the House of Delegates with a 51-49 party-line vote, aimed to raise the current minimum wage of $12 per hour to $13.50 by January 2025 and then to $15 by January 2026. The preceding wage law from 2020 incrementally raised the minimum wage from $9.50 to $12.00 per hour as of January 1, 2023.


Governor Youngkin’s veto of the bill will continue to stir debate across the state. Youngkin argues that the non-market increases in wages would raise costs on small businesses, without regard to economic differences in the varying regions across the state. Advocates for the wage increase argue that it would help working families afford basic necessities and keep up with inflation. Additional debate continues as to whether government mandated wage increases, as opposed to free-market increases, contribute to rises in inflation.


While additional wage increases between 2023 and 2026 required legislative action, Va. Code Section 40.1-28.10 still includes a unique wage adjustment scheme. Beginning October 1, 2026, and every year thereafter, the state must determine the adjusted state hourly minimum wage for the following January 1. The adjusted wage is calculated by adding (i) the current state hourly minimum wage rate to (ii) a percentage of that rate equivalent to the percentage increase in the United States Average Consumer Price Index for all urban consumers (CPI-U) published by the Bureau of Labor Statistics, or a successor index, over the most recent available calendar year. This adjustment ensures that the minimum wage keeps pace with inflation, and the adjustment amount cannot be negative.

Does the Minimum Wage in Virginia Change in 2024?

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No. While the Federal minimum wage for nonexempt employees still remains set at $7.25 per hour, Virginia, like many states, implements its own minimum wage law that supplements Federal standards.

As of January 1, 2023, Virginia’s minimum wage increased to $12 per hour, reflecting an increase from the previous rates of $9.50 (effective May 1, 2021) and $11.00 (effective January 1, 2022). However, there is no further increase in 2024. Absent further amendments, the minimum wage is set to rise again on January 1, 2025, to $13.50 per hour and to $15.00 per hour on January 1, 2026. Additionally, any increase in the federal minimum wage will automatically raise the Virginia rate, as the statute requires payment of the higher of the state or federal minimum wage.

Are Commissioned Employees Entitled to Overtime?

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The answer depends on their line or work and their pay structure. FLSA regulations do provide an overtime exemption for certain employees of retail and service establishments who are paid on a commission basis. Retail and service establishments are defined as establishments that have a recognized retail concept and where 75% of sales are not goods for resale. Factors relevant to the “retail concept” might include whether the business sells goods or services to the general public or whether the business participates in the manufacturing process.

To qualify for the exemption under Section 7(i):

1. the employee must be employed by a retail or service establishment;

2. the employee’s regular rate of pay must be at least one and one-half times the applicable minimum wage; and

3. more than half the employee’s total earnings in a representative period must consist of commissions.

The representative period cannot be less than 1 month, or more than one year.  If all of these these elements are not satisfied, the employee would remain entitled to overtime pay.  Because the employer must verify that the regular rate of pay exceeds 1.5x the minimum wage, the employer still needs to track total hours worked during each pay period.

Prior to 2020, the U.S. Department of Labor published lists of businesses that they considered to be retail or non-retail.  The new rule withdraws their arbitrary reliance on the lists, allowing more industries to argue for the exemption.  

2023 Minimum Wage Increase

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Historically, the Fair Labor Standards Act has created a national minimum wage for hourly employees. Though the federal minimum wage remains at $7.25 per hour, Virginia is now among the states that have set a higher minimum wage standard under state law. The Virginia Minimum Wage Act, passed in 2020, establishes incremental wage increases that will raise the minimum wage to $15 per hour by 2026. Effective January 1, 2023 the minimum wage in Virginia increases to $12 per hour. Absent amendments to the law, the next increase will occur in January 2025. Virginia law adopts federal exemptions under the FLSA and also includes its own exceptions, such a babysitters working fewer than 10 hours per week, students participating in a bona fide educational programs, golf caddies, taxicab drivers and persons employed in summer camps for children.