Under both federal and state law, non-exempt employees must be paid an overtime premium at 1½ times their regular rate for all hours worked over 40 in a workweek. Effective July 1, 2021, however, Virginia employers will be subject to additional overtime wage obligations beyond those required by the federal Fair Labor Standards Act. The new law includes the following:
- Implements different methods of calculating the regular rate for hourly employees v. those paid on a salaried or other regular basis.
- For hourly employees, their regular rate is their normal hourly rate plus any non-overtime wages paid or allocated for the workweek, applying the exclusions under federal law, divided by the total number of hours worked that week.
- For non-exempt employees paid on a salaried or other regular basis, their regular rate is 1/40 of all wages paid for that workweek.
- Applies the damages provisions under existing state law for violations of these new provisions. These damages exceed those available under federal law.
- Liquidated damages in an amount equal to actual damages are automatically imposed (not just for willful violations, as under federal law), and prejudgment interest is assessed at 8% per year.
- “Knowing” violations will result in treble damages.
- Civil penalties up to $1000 per violation.
- Establishes a three-year statute of limitations to bring claims for violations (not just for willful claims, as under federal law, which otherwise provides a two-year statute of limitations).
- Now permits collective actions for violations.
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