Virginia Approves Pro-Employee Overtime Law

By John V. Berry,

Virginia did not have its own overtime laws until recent approval of the Virginia Overtime Wage Act (“VOWA”), in Virginia House Bill 2063, signed on March 30, 2021 by Governor Ralph Northam. Before VOWA, those that sought unpaid overtime compensation had to previously rely on federal law through the Fair Labor Standards Act, known as FLSA.  While VOWA is similar to the FLSA, it increases costs and penalties (both civil and criminal) for Virginia employers that don’t pay required overtime to employees in a timely manner.

Similar to the FLSA, Virginia’s new overtime law requires payment of time and a half at an employee’s regular rate for hours worked in excess of 40 hours in a workweek.  But while the VOWA largely is similar to the FLSA, significant differences are likely to result in new liabilities for Virginia employers and higher damages for overtime violations for employees in Virginia that have not received their overtime pay. 

VOWA will result in a change in strategy for lawyers seeking unpaid overtime for employees. VOWA establishes a new formula for calculations for salaried employees in Virginia which will result in larger recoveries in overtime cases. VOWA will also yield larger recoveries for misclassified workers. While the FLSA has a 2-year statute of limitations to bring overtime claims, unless they are willful (intentional), VOWA extends this to 3 years. This will clearly bring greater liability to employers.

Finally, VOWA presumes an employees’ ability to obtain double damages for all overtime violations.  FLSA permits employers to argue, as a defense, that they acted in good faith in response to such claims; VOWA takes this defense away.  Under VOWA, all overtime wage violations are subject to double damages (in addition to pre-judgment interest of 8% per year). Finally, VOWA goes further and permits triple damages for employees where an employer had actual knowledge that it failed to pay the overtime wages due and acted in deliberate ignorance or reckless disregard as to whether it was paying all overtime wages owed.

VOWA also adds criminal provisions against employers.  Employers can be now found guilty of a Class 1 misdemeanor if the value of the overtime wages earned and not paid is less than $10,000. If the amount unpaid is over $10,000, the employer can be found liable for a Class 6 Felony charge.  A felony charge can also apply no matter the amount of wages at issue for a second conviction. There is a lot to sort out with the new VOWA overtime legislation in Virginia, but employees are going to have much stronger state claims for overtime in the future.  

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