Working Dignity: The Minimum Wage in Virginia

By: Parker Allen, Staff Editor

While millions of Americans enjoy increased minimum wages, Virginians are being left out. The current minimum wage in Virginia is $7.25 an hour.[1] While Virginia’s minimum wage is tied to the federal minimum wage, many other states have decided to introduce their own laws.[2] Some states have also taken increased steps to prevent wage theft, the illegal practice of withholding wages from employees.[3] In fact, twenty-nine states and the District of Columbia have all established minimum wages that are higher than their federal counterparts.[4] But, in the words of Virginia Del. Jeion Ward, “everybody deserves to work and live with dignity”[5]­­­—Virginians included.

Proponents of increasing Virginia’s minimum wage argue that this would positively impact the approximately 906,838 Virginia residents that are living below the poverty line,[6] stimulate consumer spending, and improve worker productivity.[7] Those against the raise argue that an increased minimum would hurt small businesses and could even force employers to fire current employees.[8] The increase does “have to be absorb[ed] . . . somehow” and might force businesses to rely on more skilled workers, effectively eliminating the availability of some entry-level jobs.[9] However, these arguments have been challenged, and many economists believe that an increase would have minimal effect on employment.[10]

Even so, Virginia has struggled to pass the necessary legislation.[11] Meanwhile, states like Arizona, Arkansas, Colorado, Maine, Missouri, and Washington have allowed voters to increase the minimum wage from the ballot box.[12]In others, such as California and New York, lawmakers garnered enough support to pass minimums at $12 and $15, respectively.[13] However, due to changes in the political landscape of the Virginia legislature, proponents may be able to attract the necessary votes to to increase minimum wage this term.[14]

On Tuesday, January 27, advocates turned out in support of two bills that would effectively raise Virginia’s minimum wage.[15] Virginia’s Senate Bill 7 proposes an increase that is phased-in, the first portion of which would become effective July 2020 and raise the minimum wage to $10 an hour, continuing to implement a yearly raise until reaching $15 in July 2025.[16] House Bill 395 takes a similar approach, but with a condensed timeline, that would require payments of $15 an hour as soon as July 2023.[17]

While these policy changes are promising, legislators also need to consider strengthening the state’s wage enforcement policies. In Virginia, wage claims are filed with the Virginia Department of Labor and Industry (the “DOLI”).[18] However, the Legal Aid Justice Center reports that of the 4,000 wage complaints in the past four years, the DOLI rejected half the complaints without investigation.[19] Virginia also matches the federal law that permits a “tip credit,” which allows employers to reduce the salary paid to tip earning employees.[20] In Virginia, up to $5.12 can be counted toward the minimum wage requirement and deducted as a “credit” toward the payment of the minimum wage.[21] Effectively, an employee cannot receive less than the minimum wage, as the deduction can only be made in an amount that matches tips actually received by the employee.[22] However, these guidelines need to be strictly enforced as an employer must meet clear requirements to take advantage of the credit.[23] As clarified in Perez v. Lorraine Enters, employees must have actual notice that their employer plans to use the tip credit.[24] Overall, these guidelines, among others, require greater enforcement to ensure that increased wages make it into the hands of working Virginians.

Among the fifty states, Virginia has the fifth-highest percentage of hourly workers paid at or below the minimum wage.[25] While other states have successfully implemented an increased minimum wage, Virginia residents remain frustrated with the current state of affairs. In order for working Virginians to support themselves and their families, advocates urge Virginia legislators to implement the proposed increase in conjunction with heightened enforcement mechanisms to give Virginians the compensation they deserve.

 

 

 

[1] Va. Code Ann. § 40.1-28.10 (2019).

[2] Fair Labor Standards Act, 29 U.S.C. § 206 (2012); see, e.g., N.Y. Lab. Law § 652 (Consol. 2019).

[3] See Richard Dahl, States Get Touch on Wage Theft, FindLaw (Aug. 22, 2019, 9:54 AM), https://blogs.findlaw.com/free_enterprise/2019/08/states-get-tough-on-wage-theft.html. The term “wage theft” refers to a variety of illegal practices conducted by employers, such as the violation of minimum wage laws, misclassification of employees, failure to pay overtime, and forcing workers to perform duties off-the-clock. See What Is Wage Theft?,UCLA Labor Center (May 6, 2015), https://www.labor.ucla.edu/wage-theft/.

[4] Samantha Raphelson, Minimum Wages Rising In 20 States and Several Cities, NPR (Dec. 30, 2018, 4:57 PM),https://www.npr.org/2018/12/30/681055793/minimum-wages-rising-in-20-states-and-several-cities.

[5] Alex Thorson, Virginia Workers, Allies Rally for Statewide $15 Minimum Wage, WFXR (Jan. 21, 2020 5:51 PM), https://www.wfxrtv.com/news/commonwealth-news/virginia-workers-allies-rally-for-statewide-15-minimum-wage/.

[6] Poverty in Virginia, WelfareInfo, https://www.welfareinfo.org/poverty-rate/virginia/ (last visited Jan. 27, 2020).

[7] Raising the Minimum Wage: Good for Workers, Businesses, and the Economy, Committee on Education and the Workforce Democrats, https://edlabor.house.gov/imo/media/doc/FactSheet-RaisingTheMinimumWageIsGoodForWorkers,Businesses,andTheEconomy-FINAL.pdf (last visited Jan 26, 2020).

[8] Jake Burns, Democrats Push to Raise Minimum Wage in Virginia During 2020 GA Session, CBS 6 (Jan. 27, 2020, 6:01 PM), https://wtvr.com/2020/01/07/democrats-push-to-raise-minimum-wage-in-virginia-during-2020-ga-session/. But see The $15 Minimum Wage Was Supposed to Hurt New York City Restaurants — But Both Revenue and Employment Are Up, MarketWatch (Jan. 12, 2020, 9:40 AM), https://www.marketwatch.com/story/the-15-minimum-wage-was-supposed-to-hurt-new-york-city-restaurants-but-both-revenue-and-employment-are-up-2019-10-28.

[9] Jake Burns, Democrats Push to Raise Minimum Wage in Virginia During 2020 GA Session, CBS 6 (Jan. 7, 2020, 6:01 PM), https://wtvr.com/2020/01/07/democrats-push-to-raise-minimum-wage-in-virginia-during-2020-ga-session/.

[10] See Samantha Raphelson, Minimum Wages Rising In 20 States and Several Cities, NPR (Dec. 30, 2018, 4:57 PM),https://www.npr.org/2018/12/30/681055793/minimum-wages-rising-in-20-states-and-several-cities; see also $15 Minimum Wage, IGM Forum (Sept. 22, 2015, 11:01 AM) http://www.igmchicago.org/surveys/15-minimum-wage.

[11] Keya Vakil, Virginia’s Minimum Wage Lags Behind Other States, the dogwood (May 1, 2019, 12:01 PM), https://vadogwood.com/news/economy/virginias-minimum-wage-lags-behind-other-states/.

[12] Samantha Raphelson, Minimum Wages Rising In 20 States and Several Cities, NPR (Dec. 30, 2018, 4:57 PM),https://www.npr.org/2018/12/30/681055793/minimum-wages-rising-in-20-states-and-several-cities.

[13] Cal. Lab. Code § 1182.12 (Deering 2019); N.Y. Lab. Law § 652 (Consol. 2019).

[14] See Eric Bradner & Ryan Nobles, Democrats Will Control Virginia Government for the First Time in More Than Two Decades, CNN Politics(Nov. 6, 2019, 9:47 PM), https://www.cnn.com/2019/11/05/politics/virginia-election-democrats-control/index.html.

[15] S. 7, 2020 Gen. Assemb., Reg. Sess. (Va. 2020); H.D. 395, 2020 Gen. Assemb. (Va. 2020).

[16] S. 7, 2020 Gen. Assemb. (Va. 2020).

[17] H.D. 395, 2020 Gen. Assemb., Reg. Sess. (Va. 2020).

[18] Claim for Unpaid Wages Form, Department of Labor And Industry, https://www.doli.virginia.gov/labor-law/payment-of-wage-english/claim-for-unpaid-wages-form/ (last visited Jan. 27, 2019).

[19] Laura Goren & Ashley C. Kenneth, Raising the Wage in Virginia Will Benefit Working Families, The Commonwealth Institute (Dec. 12, 2019), https://www.thecommonwealthinstitute.org/2019/12/12/raising-the-wage-in-virginia-will-benefit-working-families/; Jeff Jones, Getting Workers What They’re Owed, Legal Aid Justice Center (Dec. 4, 2019), https://www.justice4all.org/2019/12/07/getting-workers-what-theyre-owed/.

[20] See 29 C.F.R. § 531.52 (1999).

[21] Lisa Guerin, Virginia Law for Tipped Employees, NOLO, https://www.nolo.com/legal-encyclopedia/virginia-laws-tipped-employees.html (last visited Jan. 27, 2019); see also Perez v. Lorraine Enters., 769 F.3d 23 (1st Cir. 2014) ([A]n employer may pay a tipped employee a cash wage as low as $2.13 per hour and count the tips received to make up the difference between the hourly wage paid and the prevailing hourly minimum wage rate.”).

[22] Lisa Guerin, Virginia Law for Tipped Employees, NOLO, https://www.nolo.com/legal-encyclopedia/virginia-laws-tipped-employees.html (last visited Jan. 27, 2019).

[23] See Perez v. Lorraine Enters., 769 F.3d 23 (1st Cir. 2014) (explaining that it is employers’ burden to show that they have met the following requirements: (1) the employee’s job regularly affords him tips in excess of $30 per month, (2) the employee retains the tips received, (3) the employer has informed the employee in advance that they intend to count a portion toward the required minimum wage).

[24] Perez v. Lorraine Enters., 769 F.3d 23 (1st Cir. 2014) (the “notice provision is strictly construed and normally requires that an employer take affirmative steps to inform affected employees of the employer’s intent to claim the tip credit.”).

[25] Keya Vakil, Virginia’s Minimum Wage Lags Behind Other States, the dogwood (May 1, 2019, 12:01 PM), https://vadogwood.com/news/economy/virginias-minimum-wage-lags-behind-other-states/.

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