Several changes to Virginia wage laws were included among the new legislation that went into effect on July 1.

The new Virginia Wage Payment Act allows for a civil lawsuit to be filed in state court for an employer’s failure to timely compensate a worker for wages or other benefits owed to that person.

This could include payment for improper deductions, including on final wages, as well as failure to pay for bonuses, commissions, overtime and other wages and compensation.

The lawsuit can be brought within three years and be brought on behalf of the employee individually or collectively on behalf others.

For example, if an employer misclassifies a group of employees (for instance IT technicians) as exempt from overtime, but the employees are actually non-exempt and they work overtime over a period of years, the employer can be sued in state court for back wages, prejudgment interest and attorney’s fees and costs for all employees in that category.

As an added layer of punishment, for employers who are found to have knowingly violated the law, the court must award “treble” damages or three times the amount owed.

Employees who seek redress for their loss of compensation cannot be retaliated against under the new law. Employees who feel retaliated against can file a complaint with the Virginia Department of Labor and Industry, which can file a lawsuit on the employee’s behalf with the employee’s consent.

If found liable, the employee can be reinstated and be awarded lost wages and liquidated damages equal to the lost wages.

In fact, the state agency has the authority to independently investigate violations of the law and sue for lost wages even without the employee’s consent.

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A pay transparency law also was enacted by the state lawmakers.

The new law prohibits employers from enacting or enforcing policies that limit the ability of workers to discuss compensation issues with other employees. This has always been the case with non-supervisory employees in the private sector through the National Labor Relations Act, but this new Virginia law applies universally.

Under the new law, employers may not discharge or retaliate against an employee because the worker inquired about, discussed with or disclosed information about his or her own wages or compensation or that of another employee’s wages or compensation. Workers also can’t be discharged or retaliated against if they file a complaint with the Virginia Department of Labor and Industry about violations of the law.

Employers who violate the law are subject to a civil penalty of $100 per violation.

The exceptions to the law include employees who have access to other employees’ or applicants’ compensation information as part of their essential job functions, such as human resources professionals, payroll administrators or benefits specialists.

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The minimum wage increases to $9.25 an hour from $7.25 an hour on May 1.

The state’s minimum wage will increase to $11 an hour on Jan. 1, 2022, and will successively increase until Jan. 1, 2026 when minimum wage will be $15 per hour (although in 2025 there must be additional approval from the General Assembly).

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Employers should:

• Review compensation policies and plans, including bonus plans, incentive compensation plans, tuition reimbursement policies, and paid vacation or paid time off policies for clarity. Correct vague or ambiguous provisions to avoid an employee making a claim for compensation that was not intended.
• Review agreements and offer letters and amend those that do not have clear provisions for reimbursement, and deduction of wages, including relocation allowance, tuition reimbursement, external training costs, company equipment, or advance leave.
• Review bonus and other compensation agreements to make clear when the commission/bonus is earned. Too often an employee earns the compensation but then leaves the organization before it is paid, and then the employer attempts to withhold it. Agreements must redefine when the commission/bonus is earned.
• Develop a robust internal process for reporting and investigating wage payment violations, including an anti-retaliation provision. Employers should welcome employees who raise wage concerns so that they can be properly compensated.
• Prepare to increase the minimum wage for any impacted employee by May 1.
• Eliminate any policies that contain language prohibiting employees from discussing wages.