Following last year’s wave of new employment laws (previously covered as follows: Part 1, Part 2, and Part 3), Virginia has adopted a variety of new laws that will take effect July 1 and continue to transform the Commonwealth’s employment law landscape. Virginia employers should carefully review these new laws to ensure compliance in this changing environment and in light of newly expanded enforcement mechanisms.
Minimum wage increase
While Virginia adopted incremental increases to the minimum wage set to reach $15 per hour by 2026, the first step-increase was delayed due to the pandemic. Effective May 1, 2021, the minimum wage increased to $9.50 per hour and is set to increase again effective January 1, 2022. The Virginia Department of Labor and Industry (DOLI) has issued a minimum wage guide for employers that includes an optional workplace posting announcing this increase.
The Virginia Overtime Wage Act
Governor Ralph Northam signed the Virginia Overtime Wage Act, which will take effect on July 1, 2021 and now provides overtime protections for employees under state law (previously overtime protections were only under federal law). While the new law incorporates the exemptions from overtime under the federal Fair Labor Standards Act (FLSA) and purports to graft the FLSA’s overtime protections into state law, there are several notable differences between the FLSA and Virginia’s new law.
Unlike the FLSA, Virginia’s new law (i) establishes a three-year statute of limitations thereby allowing recovery of up to three years of back wages, unlike the FLSA’s typical 2-year lookback; (ii) does not provide for any good faith defense for employers; and (iii) forecloses an employer from using the fluctuating workweek method or from paying a fixed amount to cover straight time wages for all hours worked. Accordingly, non-exempt employees paid a salary or on some other non-hourly basis are entitled to overtime for any hours worked over 40 at “one and one-half times” a regular rate of 1/40th of all wages paid for that workweek. Also unlike the FLSA, the new law’s definition of “employer” includes derivative carriers within the meaning of the federal Railway Labor Act. Unlike prior Virginia law, the new law provides for a private right of action under Virginia’s wage payment statute (with enhanced remedies enacted last year).
Continued expansion of the Virginia Human Rights Act
Governor Northam signed H.B. 1848, which will take effect on July 1, 2021 and adds “disability” to the list of characteristics protected from discrimination under the Virginia Human Rights Act (VHRA). This addition comes after the VHRA was expanded last year to cover most Virginia employers. Notably, the new law requires employers to post information concerning an employee’s rights to reasonable accommodation for disabilities in a conspicuous place and include the same in any employee handbook. This information must also be provided to new employees at hire and to any employee within 10 days of the employee providing notice of a disability.
Additionally, Governor Northam also signed H.B. 1864, H.B. 2032, and S.B. 1310, which extend coverage of the VHRA, wage payment laws, and workplace safety protections to certain domestic workers. Those laws will take effect July 1, 2021.
New Office of Civil Rights within Office of the Attorney General
In January 2021, Attorney General Mark Herring created the Office of Civil Rights within the Office of the Attorney General to expand, enhance, and centralize the agency’s resources for enforcing state civil rights protections. The Attorney General has indicated that the office’s key areas of focus are (i) conducting pattern or practice investigations to identify and eliminate unconstitutional and illegal policing; (ii) combating discrimination in employment and places of public accommodation; (iii) combating housing discrimination; (iv) combating LGBTQ+ and gender-based discrimination; and (v) protecting the rights of expectant and new mothers.
In addition to these actions, the Governor signed H.B. 2147, which effective July 1, 2021 will make the Office of Civil Rights a permanent part of the Office of the Attorney General with the express mission to investigate and bring actions to combat discrimination based on the protected classes under the VHRA and other state civil rights laws.
Legalization of recreational marijuana
While Virginia initiated steps last year to decriminalize marijuana and move towards legalization in 2024, Governor Northam signed S.B. 1406 and H.B. 2312, which accelerates legalization for possession and use of small amounts of marijuana effective July 1, 2021. Additionally, Governor Northam signed H.B. 1862, which, subject to certain exceptions, will prohibit employers from discharging, disciplining, or discriminating against an employee for the lawful use of cannabis oil pursuant to a valid written certification issued by a practitioner for treatment under Va. Code § 54.1-3408.3.
Despite these changes, employers may still take disciplinary action against an employee for use or possession of marijuana during work hours and marijuana remains an illegal substance under the federal Controlled Substances Act. While employers may maintain policies that prohibit the use of illegal substances and continue to conduct drug testing, employers should be mindful of the practical effects such policies and practices may have now with legalization under Virginia law. Employers who conduct background checks should also ensure that their practices comply with the new law’s expanded prohibition, in most situations, on requesting information on past arrests, criminal charges, or convictions for marijuana related activity that is now deemed lawful. Additionally, with the expansion of the VHRA to now include disabilities, it is unclear what accommodation obligations, if any, an employer may have under state law for medicinal users.
Paid sick leave requirements for certain home healthcare workers
While several efforts to enact paid sick leave requirements for all employers did not pass the legislature, the Governor signed H.B. 2137, which will take effect on July 1, 2021 and require employers to provide paid sick leave to home healthcare workers who provide services to patients enrolled in Medicaid and work on average at least 20 hours per week or 90 hours per month. (Notably, the law excludes certain health professionals employed by a hospital licensed by the Department of Health who work 30 hours or less per month on average.) Employers must provide covered employees one hour of paid sick leave for every 30 hours worked, capped at 40 hours in a year. Accrued sick leave may be used to care for a family member’s or employee’s (i) mental or physical illness, injury, or health condition; (ii) need for medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition; or (iii) need for preventive medical care. The law also prohibits employers from retaliating against an employee related to taking such leave.
For more information on developments in these areas or their impact on your business, please contact Betty Graumlich at bgraumlich@reedsmith.com, Noah Oberlander at noberlander@reedsmith.com, or the Reed Smith lawyer with whom you normally work.