During the last legislative session, Virginia lawmakers amended Virginia’s Wage Payment Law to include certain disclosures for employees.
Effective Jan. 1, employers must provide “paystubs” to employees on “each regular pay date” to include certain information about an employee’s wages.
While this might seem like something employers are already doing, some employers only provide employees with information about their pay and deductions upon request.
In addition, under current law, employers were only required to provide a “written statement” that showed the employee’s gross wages and deductions, without details of how those wages were calculated.
Two new provisions were added to the law.
First, employers cannot withhold any part of an employee’s wages or salary, other than customary withholdings, “without the written and signed authorization of the employee.”
Furthermore, “an employer, upon request of his employee, shall furnish the latter a written statement of the gross wages earned by the employee during any pay period and the amount and purpose of any deductions therefrom.”
The second amendment requires, on each regular pay date, employers (other than agriculture), to provide the employee a “written statement” by a “paystub or online accounting” that shows:
• the name and address of the employer;
• the number of hours worked during the pay period;
• the rate of pay;
• the gross wages earned by the employee during the pay period; and
• the amount and purpose of any deductions.
The law applies to exempt and non-exempt employees.
While the law imposes significant penalties for failure to pay wages, the law is unclear on the specific remedy if an employer violates these new administrative requirements, other than possible “proceedings” to enforce compliance.
Regardless, employers should take steps to comply.
These amendments are likely the result of a lack of transparency for workers in how their pay is calculated.
Employers can partly blame the antiquated 1938 federal law, the Fair Labor Standards Act, which requires overtime to be paid for all hours worked in a workweek, not a pay period. This means that earned overtime pay could overlap into two pay periods when an employer pays twice a month, adding confusion for workers.
There is nothing that Virginia employers can do to fix the antiquated FLSA.
However, employers can make sure that their employees enjoy full transparency on their regular rate of pay, time worked and earned overtime.
Too often employers do not account for all hours worked for hourly workers, or make improper partial day deductions for exempt workers. This transparency will help both the employer and employee to account for working time and provide an opportunity to dispute any discrepancies.
Finally, what isn’t new in the law but deserves mention is the provision in the law that states, “No employer shall require any employee, except executive personnel, to sign any contract or agreement which provides for the forfeiture of the employee’s wages for time worked as a condition of employment or the continuance therein, except as otherwise provided by law.”
If a non-management employee quits and keeps the company’s computer, for instance, the business cannot withhold that employee’s earned pay to account for it. The employee must be paid and the employer can sue (or seek criminal charges) for the theft.
For an executive employee (defined generally as a manager), the employer can only withhold pay with signed consent.
There are some exceptions for advanced pay (for instance, the employee takes a vacation before it is earned or similar examples).