January 2023

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Virginia overtime wage act provisions replaced with FLSA overtime requirements

05/05/22

Author: ADP Admin/Wednesday, May 4, 2022/Categories: Compliance Corner , State Compliance Update, Virginia

On April 11, 2022, the Governor or Georgia signed into law House Bill 1173 (HB 1173).  HB 1173 largely aligns Virginia overtime standards with federal standards. HB 1173 is effective on July 1, 2022.   ADP is actively working to assess any impact this development may have on ADP systems and will provide an update on any actions clients may need to take as soon as possible.

The Details

On March 30, 2021, the Virginia Overtime Wage Act (VOWA) was signed into law.  Prior to the VOWA Virginia did not have its own overtime law and utilized the federal rules under the Fair Labor Standards Act (FLSA).

 

While VOWA, which was effective July 1, 2021,  is similar to FLSA in many ways, there are significant differences.  Departures from the FLSA include how the regular rate of pay is calculated, a longer statute of limitations to bring potential claims, and the possible damages available.  In particular, under VOWA, if a non-exempt employee was paid on a salary basis, their “regular rate of pay” for purposes of calculating overtime was determined by dividing that compensation by 40 hours rather than actual hours worked (the FLSA standard). The VOWA standard resulted in a higher regular rate than the FLSA standard.  


Repeal of VOWA  

HB 1173 stipulates that Virginia employers, effective July 1, 2022, who violate overtime requirements will be liable for all applicable remedies, relief, or damages under the FLSA. HB 1173 clarifies the state will use FLSA exemptions, overtime calculation methods (i.e. the FLSA standard for “regular rate of pay”) and the definitions of "employer" and "employee'’ as defined under the FLSA.

Addition of § 40.1-29.3 

HB 1173 also added a new section to the Virginia Code that requires an employer to compensate employees of a “derivative carrier” at a rate not less than one and one-half times the employee's regular rate of pay for any hours worked in excess of 40 hours in any one workweek and provides for the method of calculating the regular rate for overtime purposes. It is important to note that Section 13(b)(3) of the FLSA exempts from its overtime pay requirements, but not its minimum wage requirement, “any employee of a carrier by air subject to the provisions of Title II of the Railway Labor Act.”

Next Steps:

Effective, July 1, 2022, Virginia employers may pay salaried non-exempt employees overtime based on the FLSA standard rather than the formula set out in the VOWA.

Have Questions?

Please contact your dedicated service professional with any questions.  

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Tags: 05/05/22

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