Seven Things That Employers Need to Know About Virginia’s New Overtime Wage Act

Virginia recently amended its wage law in a very significant manner by enacting the Overtime Wage Act (Act). The Act took effect on July 1, 2021.

Key takeaways from the amendment include the following:

  1. The Act has changed the manner in which the regular rate of pay is calculated for salaried, non exempt employees. Under Section 40.1-29.2(B)(2) of the Virginia Code, the regular rate of pay for salaried, non exempt is now one fortieth (1/40th) of all wages paid in a particular workweek.
  2. Consequences of the change in the calculation of the regular rate for salaried, non exempt employees. The practical effect of this change is that the so-called Fluctuating Work Week (FWW) method, which exists under the (federal) Fair Labor Standards Act (FLSA), whereby an employer may calculate overtime at one half of the regular rate (as opposed to time and a half as otherwise required under the FLSA), is not legal in Virginia.
  3. The Act permits employees to bring collective actions. Employees may bring overtime claims individually, as well as also jointly with other aggrieved employees, or on or behalf of similarly situated employees as a collective action consistent with the collective action procedures of the FLSA.

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