Labor & Employment Law

FAQS – Virginia Overtime Law

FAQs Overtime Wage Act Update

The budget amendment enacted on August 10, 2021 by the Virginia General Assembly changed some definitions in Va. Code § 40.1-29.2 (“The Virginia Overtime Wage Act”) effective immediately. The Department has updated our FAQs to reflect those changes, some of which are very significant. Please review these updated FAQs for any changes. This amendment is not retroactive for the period of July 1 – August 9.

1. Does Virginia law require overtime pay?

Starting July 1, 2021, Virginia law will require overtime pay of one and one-half times the rate of pay for any hours worked in excess of 40 per week.

2. Are all employers required to pay overtime?

Yes, aside for some limited exemptions for labor organizations, car dealerships, and railroad carriers. This includes Virginia agencies and localities, who may pay overtime compensation with compensatory leave in lieu of wages.

3. Does the law provide any exemptions from the overtime requirement?

Yes. There are limited exemptions for executives, officers, and administrators, as well as certain bona fide professionals, seasonal recreational workers, certain farm workers, and certain domestic service workers (such as nannies). For a complete list of exemptions, please review the exemptions listed under § 29 U.S.C. 213(a) located here.

4. Are government employees covered by the law?

The statute explicitly states that the Commonwealth, constitutional officers, agencies, institutions, political subdivisions and any public body are considered employers for the purposes of this law. Federal employees are not covered by the law.

5. How many hours must be worked before the overtime rate applies?

All hours worked over 40 in a seven-day period are paid the overtime rate.

Note:  There is an exception for hospital employees where they can be paid on an 80 hour, fourteen day period (and also are credited for overtime wages for hours worked longer than 8 hours in a workday).  This requires an agreement between the employer and the employee.

6. Do vacation or sick leave hours count toward the 40 hour threshold?

No. The Overtime law only applies to hours actually worked over 40.

7. How is an employer required to calculate the overtime rate of pay for hourly employees?

The rate of pay is one and one half times their regular hourly rate. For instance, if the normal hourly rate was $10 per hour, any hours worked over 40 hours must be paid at a rate of $15 per hour.

8. Does the law establish a fixed work week for determining overtime?

There is no fixed work week, however the period calculated must be seven consecutive 24 hour periods. For example, if an employer wanted a pay period to begin at 7AM on a Monday, the period for purposes of overtime would run for seven consecutive 24 hour periods from 7AM.

9. Are salaried employees exempt from the overtime requirement?

No, unless they fall under the exemptions for executives, officers, or administrators. Simply being paid by salary rather than hourly does not exempt an employee from being eligible for overtime.

10. How is the overtime rate calculated for salaried employees?

A salaried employee’s regular rate is defined as one-fortieth of their salary. For example, if a salary employee was paid $800 per week, their “regular” rate of pay would be considered $20 an hour. Therefore, any overtime they work must be paid out at a $10 an hour premium for all hours worked after 40.

11. How is overtime calculated for piece-rate employees?

A piece-rate employee who works more than 40 hours in a week is entitled to overtime for all hours over 40.  The regular rate for piece rate employees can be calculated two ways.  They can be paid either one and one half times their piece rate for all pieces produced after 40 hours.  The other option is their regular rate can be calculated by taking their total earnings for that week and dividing those earnings by the hours worked (similar to hourly employees).  They shall then be paid an overtime premium of half the regular rate for all hours worked over 40.  The piece rate compensation has already covered their base pay for those hours, assuming it results in a rate above the Virginia minimum wage.

12. Can employees be given “comp time” instead of overtime pay?

Employers cannot provide comp time instead of pay. The overtime statute states “wages” are defined the same as in § 40.1-28.9. Overtime wages must be paid in legal tender of the United States or checks or drafts on banks negotiable into cash on demand or upon acceptance at full value.

Note:  State and local governments and their agencies, as well as fire protection and law enforcement employees may be compensated with leave for overtime hours instead of wages.

13. How is a tipped employee’s overtime rate calculated?

Tipped employees are assumed to have a wage rate of the state minimum wage unless there is an agreement that they should receive more, and must be paid one and one half times the minimum wage. Tips earned are credited toward that rate.

14. How is a commissioned employee’s overtime rate calculated?

Commissioned employees are treated similarly to tipped employees.  Unless there is an employment agreement that says otherwise, they are assumed to have a wage rate of the state minimum wage, and must be paid one and one half times the minimum wage for overtime hours.  Commission earned is credited toward that rate.

If there is an agreement for a higher wage, the overtime rate will be calculated as one and one half times that base rate (base rate divided by 40 if salary, and base rate divided by the hours worked if hourly).  Commission earned is then credited toward the overtime rate.

15. Is overtime pay required for weekend or night work?

Overtime is only required for hours worked in excess of 40 for a week.

16. Are employers required to post a notice or a poster concerning the new OT law?

The law does not require an employer to post a notice or poster.

17. Who enforces the overtime law in the Commonwealth?

The Labor and Employment Division investigates violations of the Virginia Overtime Wage Act. There is also a private right of action in the statute, where an employee or employees may bring a private lawsuit against an employer.

18. How can an employee file a claim for overtime wages with the Department of Labor and Industry?

Forms for overtime wage claims can be downloaded from the website www.doli.virginia.gov or you may obtain a form by calling (804) 786-2706. The overtime rate applies to time worked starting July 1, 2021.  Claims for overtime worked prior to July 1, 2021 cannot be accepted.

19. How long does an employee have to file a claim for overtime wages?

The statute of limitations for claims is three years from the violation. However, the Department cannot investigate claims that pre-date the effective date of the statute – July 1, 2021.

20. What damages and/or penalties are provided for under the overtime law?

Damages are calculated as the amount of lost wages, and an additional amount equal to the lost wages as liquidated damages. These totals are paid to the claimant. Additionally, a Civil Monetary Penalty of up to $1000 can be assessed per violation. Suits brought in court may also result in triple damages for knowing violations. There may also be criminal liability for willful violations.