Virginia Overtime Wage Act Takes Effect on July 1, 2021

On July 1, 2021, the Virginia Overtime Wage Act (the “Act”) takes effect.  The Act provides Virginia state law overtime protections to employees that are in addition to federal Fair Labor Standards Act (FLSA) overtime protections.  The Act incorporates FLSA exemptions from overtime but deviates from the FLSA in a few notable ways.  For example, the Act prohibits an employer from using the “fluctuating workweek” method of payment or paying a fixed amount to cover straight time wages for all hours worked.  This means that non-exempt employees who are paid a salary (or on another non-hourly basis) are entitled to receive overtime for any hours worked over 40 per week.  Overtime must be calculated at 1.5 times a regular rate of 1/40th of all wages paid for that workweek.

Other notable differences between the Virginia Overtime Wage Act and the FLSA include:

 ·         The Act has a 3-year statute of limitations, which allows for a 3-year look back when calculating back wages; the FLSA has only a 2-year look back (except for willful violations).

·         The Act does not provide a “good-faith” defense for employers; all violations are subject to double damages in addition to pre-judgment interest at eight percent per year (for willful violations, treble damages).

·         The Act authorizes collective/class actions.

In the current environment of “hybrid” work, where non-exempt employees are working from remote workspaces, employers should ensure that company overtime practices and policies are compliant, clear and consistent, to avoid claims by non-exempt employees of “off the clock” work. And if you’ve had a nagging feeling that certain roles in your organization have been misclassified as “exempt”, because the job duties indicate that those positions should in fact be treated as “non- exempt”, NOW is the time to address and correct those errors (and you will sleep better at night, so it’s a win-win). Virginia employers should also note that the Act provides a private right of action for employees to sue under the Virginia Wage Payment Act.  Recall that just last year, the remedies available to a plaintiff under the Virginia Wage Payment Act were enhanced. Bottom line: review and evaluate your classifications and timekeeping practices, and get your house in order.

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