01$12.77 in 2026, $13.75 in 2027, $15.00 in 2028, then CPI-indexed
Virginia's minimum wage rose to $12.77/hr on January 1, 2026, up from $12.41 in 2025. The increase was driven by the prior CPI-based formula under the original Virginia Minimum Wage Act. HB 1 / SB 1 (passed 2025) codified the next phase-up steps: $13.75 effective January 1, 2027; $15.00 effective January 1, 2028; CPI-indexed annually thereafter.
Tipped workers remain at the federal $2.13 cash wage floor under VA's wage law (which permits the federal tipped rate). Employer must make up the difference between cash + tips and the applicable state minimum wage. Workers earning more than $30/month in tips qualify as tipped employees (federal threshold). Virginia does not have a state-specific 80/20 rule.
Federal $684/week ($35,568/year) exempt threshold applies. Virginia does not set a higher state-specific exempt threshold. The DOL's attempted 2024 increase to $1,128/week was vacated by the Eastern District of Texas in November 2024, leaving the federal $684 in place. VOWA's 2022 amendment expressly incorporates FLSA exemptions.
Virginia does not have a state-specific overtime threshold beyond FLSA's 40-hour weekly trigger. VOWA (Va. Code § 40.1-29.2) was amended in 2022 to mirror FLSA. Enforcement of overtime is directed to federal DOL or private litigation — DOLI does not directly enforce overtime under VOWA after the 2022 amendment.
One distinctive carve-out: Va. Code § 40.1-29.3 entitles derivative carrier employees (air carriers and railroads subject to the Railway Labor Act, 45 USC § 181 et seq.) to overtime under Virginia state law, even though federal law would otherwise exempt them. These workers can pursue state civil action for unpaid overtime, liquidated damages, and attorney fees under § 40.1-29.3.
Read the full Virginia multi-year wage phase-up to $15 by 2028 guide →
02Aligned definitions across statutes; treble damages for knowing violations
HB 238 represents the most significant restructuring of Virginia's wage and hour statutes since the Virginia Minimum Wage Act's 2021 amendment. Effective July 1, 2026, the legislation: (1) aligns 'employer' definitions across the minimum wage, wage payment, overtime, and misclassification statutes; (2) adds a unified 'wages' definition encompassing hourly wages, prevailing wages, piece rate wages, day rates, salaries, overtime wages, commissions, tips, bonuses, and damages due to misclassification; (3) requires 3-year paystub retention; (4) authorizes liquidated and treble damages for misclassified workers and minimum wage claimants.
The aligned employer definition closes prior compliance gaps. Pre-HB 238, an entity could be an 'employer' for wage payment purposes but not for misclassification purposes, creating opportunities for definitional arbitrage. Post-HB 238, the same entity definition applies across statutes — meaning compliance under one statute requires consistent compliance across all four.
Damages framework is significantly enhanced. Workers prevailing on wage claims may recover liquidated damages (matching the unpaid amount, similar to FLSA) PLUS treble damages (3×) for knowing violations. The knowing standard requires more than mere awareness — typically established through pattern violations, ignorance after specific notice, or systematic noncompliance. Honest mistakes generally don't qualify. Courts retain discretion on treble damages but the framework is enabling, not mandatory.
Recordkeeping: 3-year paystub retention codified in statute (previously a regulatory requirement). All wage records — time records, payroll, commissions, deductions, classification documentation — must be maintained for the 3-year period. Records gaps are typically interpreted against the employer in litigation.
Statute of limitations: misclassification claims have an extended SOL under HB 238. Combined with the enhanced damages framework, the longer reach-back creates substantial exposure for systematic misclassification patterns. The Virginia plaintiffs' bar is expected to expand wage class action filings starting July 1, 2026 as the new framework takes effect.
Read the full Virginia hb 238 wage statute restructuring (july 2026) guide →
03All non-exempt workers protected; discharged workers protected absent severance
Virginia's existing non-compete framework under Va. Code § 40.1-28.7:8 prohibits enforcement against 'low-wage employees' — defined as workers earning less than the average weekly wage in Virginia, currently $1,507.01/week (about $78,365 annually) for 2026. Existing low-wage workers may still be subject to narrowly tailored client non-solicitation provisions that explicitly allow client-initiated contact.
SB 170 expands coverage in three significant ways effective July 1, 2026: (1) all non-exempt (overtime-eligible) workers are protected, regardless of wage level — including workers earning above $1,507.01/week if they're FLSA non-exempt by duties test; (2) discharged workers cannot be subject to enforcement of any restrictive covenant unless the employer provides severance benefits or other monetary payment; (3) any restrictive covenant entered into, amended, or renewed on or after July 1, 2026 must comply with the new requirements.
The 'discharge' exception is narrow. Discharge for cause: enforcement remains permitted (worker engaged in conduct justifying termination). Worker resignation: enforcement permitted (worker chose to leave). All other terminations — layoff, position elimination, performance issues that don't qualify as 'for cause' — fall under the no-enforcement-without-severance rule.
Severance disclosure requirement: employers must disclose any severance benefits or monetary payment at the time the restrictive covenant is executed. Pre-July 1, 2026 agreements (existing covenants) are grandfathered under the prior framework. Renewal or amendment after July 1, 2026 brings the agreement under the new requirements.
Restrictive covenants that remain enforceable: NDAs (confidentiality of trade secrets, customer information); narrowly tailored client non-solicits with carve-out for client-initiated contact; trade-secret protections under separate Virginia Trade Secrets Protection Act (Va. Code § 59.1-336 et seq.); employee non-solicits (with narrowing under SB 170 for non-exempt workers). Multi-state operators expanding to VA should redraft template employment agreements: remove broad non-competes, lean on NDAs and properly scoped non-solicits, ensure venue/governing-law clauses are enforceable.
Read the full Virginia sb 170 non-compete ban (july 2026) guide →
04Wage range disclosure required in postings and at compensation discussion
SB 215 / HB 636 adds Va. Code § 40.1-28.7:11, effective July 1, 2026. The statute applies to all Virginia employers regardless of size. Wage range disclosure is required: (1) in every job posting (internal and external); (2) to applicants at the time of compensation discussion; (3) to current workers upon request and at any compensation change.
Wage range definition: the minimum and maximum hourly rate or salary that the employer in good faith anticipates relying on at the time of posting or compensation decision. Open-ended ranges (e.g., '$50,000+') are not compliant — the range must have both lower and upper bounds. Variable compensation (commissions, bonuses) need not be disclosed unless guaranteed.
Salary history restrictions: employers cannot rely on or inquire about an applicant's compensation history in setting offers. The salary history restriction is independent of the disclosure requirement — both apply simultaneously to applications post-July 1, 2026.
Enforcement: DOLI is finalizing regulations on penalty structure and complaint procedures. Workers may file complaints with DOLI or pursue private civil claims. The penalty structure is expected to mirror Maryland's framework ($300 first violation, increasing for repeats) plus potential injunctive relief. Detailed regulations expected by mid-2026.
Combined with HB 238's enhanced damages, pay equity disparities revealed through transparency may trigger wage exposure under the enhanced remedies framework. Workers receiving disclosure can identify pay disparities within their position; if those disparities correlate with protected class membership, federal Title VII and Virginia Human Rights Act (Va. Code § 2.2-3900 et seq.) claims become available. Documentation of legitimate basis for compensation differentials becomes operationally critical.
Read the full Virginia sb 215 / hb 636 pay transparency (july 2026) guide →
05Virginia Overtime Wage Act incorporates federal FLSA — except for air and rail
Va. Code § 40.1-29.2 (VOWA) was originally enacted with an effective date of July 1, 2021 — creating a state-specific overtime statute parallel to FLSA. The original version generated significant confusion because it created subtly different calculation methods than FLSA, leading to inconsistent litigation outcomes.
The 2022 amendment to VOWA fundamentally simplified the framework. Effective July 1, 2022, VOWA now expressly incorporates FLSA overtime standards, exemptions, and calculation methods. For most Virginia workers, VOWA produces identical results to FLSA: 1.5x regular rate for hours past 40 in a workweek, federal exempt classification rules, federal regular rate calculation under 29 CFR Part 778.
Enforcement allocation is unusual. After the 2022 amendment, DOLI does NOT directly enforce overtime under VOWA. Workers with overtime claims must either: (1) file with US DOL Wage and Hour Division (federal investigation and penalty framework); or (2) pursue private litigation (Virginia courts apply VOWA's incorporated FLSA standards). This is structurally different from most states where the state labor agency investigates and enforces.
Va. Code § 40.1-29.3 provides a unique Virginia carve-out: derivative carrier employees — workers for air carriers subject to the Railway Labor Act (45 USC § 181 et seq.) — are entitled to overtime under Virginia state law, even though federal law would otherwise exempt them. The provision applies primarily to airline pilots, flight attendants, and other airline workers. These employees can bring state civil action for unpaid overtime, liquidated damages, and attorney fees.
When federal and state law differ on derivative carriers, Virginia state law (more favorable to workers) governs. For most other Virginia workers, the convergence between VOWA and FLSA after the 2022 amendment means operators don't face dual analytic frameworks. The single FLSA-incorporated standard simplifies compliance.
Read the full Virginia vowa flsa mirror + derivative carrier carve-out guide →
06Federal FMLA only, plus narrow home health worker carve-out
Virginia does not have a statewide paid sick leave law for general employment. Workers in private employment generally rely on federal FMLA (12 weeks unpaid, job-protected at 50+ employee employers) and any voluntary employer-provided sick leave or PTO. Virginia is structurally distinct from neighboring DC, MD, and PA on this dimension.
The narrow exception: Va. Code § 40.1-33.6 (effective July 1, 2021) provides paid sick leave specifically for home health workers. Coverage applies to employees of agencies, businesses, or individuals providing personal care, respite, or companion services in private residences. Accrual: 1 hour of PSL per 30 hours worked, up to 40 hours per year. Use cases: worker's own illness, family member illness, preventive care for self or family.
PFML legislation has been introduced in the Virginia General Assembly multiple times since 2020. Bills have advanced through committees but have not been enacted into law. The 2025 General Assembly session was widely expected to pass paid family medical leave legislation; multiple bills remain in committee. As of 2026, Virginia has no state-administered PFML program.
Federal FMLA covers Virginia employers with 50+ employees within 75 miles. Workers eligible after 12 months of employment and 1,250 hours worked in the prior 12 months. Up to 12 weeks of unpaid, job-protected leave per 12-month period for qualifying family or medical reasons. Federal FMLA provides job protection but no wage replacement.
Multi-state operators with VA workers should plan for the likely 2027-2028 enactment of state PFML and broader PSL. The Virginia General Assembly's full Democratic control as of 2024 makes paid leave legislation more likely than in prior sessions. Operators should monitor legislation and prepare implementation timelines for likely 2027-2028 effective dates.
Read the full Virginia no statewide psl except home health guide →
07Next-payday final pay; HB 238 enhances damages framework starting July 2026
Virginia's Wage Payment Act under Va. Code §§ 40.1-29 et seq. governs wage payment timing, final pay, and remedies for unpaid wages. Final paycheck is due no later than the next regularly scheduled payday following the worker's last day of work. The same rule applies regardless of whether termination was employer- or employee-initiated. Workers cannot file wage payment claims for amounts withheld in 'good faith dispute.'
Pay frequency: bi-weekly or semi-monthly minimum. Workers paid weekly, bi-weekly, or semi-monthly. Virginia does not allow monthly pay frequencies for most workers. Wage statement disclosure required at each payday: name, total hours (if hourly), pay rate, gross wages, deductions itemized, net wages.
Remedies framework pre-HB 238 (until July 1, 2026): liquidated damages matching the unpaid amount, plus 8% interest, plus mandatory attorney fees under § 40.1-29(J). Workers can also pursue civil penalties through DOLI complaint process.
HB 238 transforms remedies effective July 1, 2026: liquidated damages (matching unpaid amount) PLUS treble damages (3×) for knowing violations. Honest disagreements about wage calculations typically don't meet the 'knowing' standard; pattern violations and ignorance-after-notice typically do. Courts retain discretion on treble damages but the framework is enabling, not mandatory.
Class action exposure: Virginia courts have certified wage classes under VWPA when patterns affect multiple workers. The 3-year SOL on wage claims (extending to misclassification under HB 238) creates substantial reach-back exposure. Combined with HB 238's enhanced damages and aligned employer definitions, post-July 2026 wage class actions in VA may become significantly more common.
Read the full Virginia final pay + wage payment statute guide →
08Multi-factor IRS-style test, with treble damages exposure post-July 2026
Virginia applies a multi-factor common law test for IC classification, similar to the IRS framework under Rev. Rul. 87-41. The test evaluates: behavioral control (how the worker is told to do the work); financial control (how the worker is paid, who provides tools, who has unreimbursed business expenses); relationship type (written agreements, employee benefits, permanence, regular business relationship). No single factor is dispositive — courts balance the factors with right of control typically weighted heavily.
The multi-factor test is more permissive than ABC test states (NJ, MA, CA, CT). Workers can be classified as IC in Virginia even when the work is part of the employer's usual course of business — provided control is properly limited and other factors support IC classification. This makes Virginia's IC framework more flexible for legitimate independent contractor arrangements than ABC test jurisdictions.
HB 238's expanded employer definition (effective July 1, 2026) reaches further than prior statutes. Va. Code § 40.1-29 will define 'employer' to include 'any person acting directly or indirectly in the interest of an employer in relation to an employee.' This brings staffing agencies, payroll services, professional employer organizations (PEOs), and labor brokers under broader scope for misclassification analysis.
Post-July 2026 misclassification damages: liquidated damages PLUS treble damages for knowing violations. The 'knowing' standard requires more than mere classification disagreement — pattern violations and ignorance after specific notice typically qualify. Courts retain discretion on treble damages.
Active enforcement: Virginia Workers' Compensation Commission and DOLI Joint Enforcement Task Force on Worker Misclassification have pursued construction industry misclassification, trucking industry classification disputes, and healthcare sector cases. The Construction Industry Code of Ethics (Va. Code § 40.1-49.10) provides additional industry-specific framework. Penalties combine state civil exposure with parallel federal IRS reclassification (Section 3509 employment tax penalties) and unemployment insurance back-contributions.
Read the full Virginia ic misclassification under hb 238 guide →