If you’re a small-business owner in the Old Dominion state, we know you’re eager to stay on top of current Virginia minimum wage rules. So, we’ve put together this quick guide with all the info you need to know about the minimum wage in Virginia.
What is the minimum wage in Virginia?
The new minimum wage in Virginia increased to $9.50 on May 1, 2021, up from $7.25 per hour the previous year. This is $2.25 more than the federal minimum wage. Unlike other states, Virginia does not exempt tipped workers from the state mandated minimum wage. For this reason, tipped employees in Virginia are to receive the same $9.50 minimum wage as all other employees plus earned tips.
The state of Virginia has a long list of employees who are exempt from the state minimum wage. Some employees who are exempt from this minimum wage rate include:
Full-time students who put in fewer than 20 hours of work per week when school is in session
Babysitters who work for fewer than 10 hours per week
Individuals under the age of 18 employed by a parent or guardian
Employees of children summer camps
Any person under the age of 16, regardless of employer
Keep in mind that counties, cities, and towns may have their own minimum wage laws. Be sure to check what local wage laws may apply to you.
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Are there plans to change the minimum wage?
Virginia’s state minimum wage is set to gradually increase each year, until it reaches $15 starting January 1, 2026. It will then be $15 per hour for workers whose employment is covered by the federal Fair Labor Standards Act (FLSA) and to public employees. A higher minimum wage may also be required by the FLSA for some workers.
While many states increase the minimum wage in accordance with the cost of living or inflation, before 2021 Virginia had not increased its minimum wage since 2009 when it went up $0.70 from $6.55.
What’s happening to the Virginia minimum wage beyond 2026?
The plan beyond 2026 is uncertain. Most Virginia minimum wage employees will be earning gradual increases per hour each year until it caps at $15 in early 2026. Some mitigating circumstances could change this. For instance, the current law allows the Virginia Commissioner of Labor and Industry to stop wage increases if they see negative job growth in the state.
How should small business owners prepare for changes to the minimum wage?
With changes to the minimum wage on the horizon, you should prepare. Here are a few options you may consider during the Virginia minimum wage increase:
- Audit your expenses: Check your cash flow in detail and create a hiring plan you can afford. In some cases, you may find that hiring temporary workers as needed is less expensive than taking on full-time regular staff.
- Make sure you hire and keep the right employees: Replacing an employee can cost a lot. You can decrease the total cost associated with recruiting and training when you hire (and then retain) the right people. Look for candidates with good track records, who come recommended, and who fit in with the company culture. Once the employee is onboarded, make sure you build a relationship and provide paths for employee growth; it makes it more likely that they will stay in their role.
- Update tech: Consider automating certain aspects of the work (like payroll); learn how to effectively manage benefits, employee taxes, and other payroll features; and find ways to reduce production costs.
As always, to make sure your business is prepared and stays in compliance, you should discuss Virginia minimum wage laws with your accountant and lawyer.