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May 04, 2022
Virginia Legislature Guts 2021 Overtime Law

In 2021, the Democratically controlled Virginia General Assembly passed the Virginia Overtime Wage Act, which expanded the state’s overtime requirements beyond those set forth in the federal Fair Labor Standards Act (FLSA). The change made an employee-friendly calculation for overtime pay, increased the statute of limitations for filing a wage claim, and added enhanced penalties for employers that failed to pay the proper overtime. Elections have consequences, however, and last year’s Republican victories in the state elections resulted in a newly constituted General Assembly that is more conservative in its outlook.

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During this year’s state legislative session, which recently ended, both the House of Delegates and the State Senate considered and adopted identical bills effectively repealing the 2021 overtime law. Thirty-two senators and 58 house members from both sides of the aisle agreed to essentially repeal the 2021 statute and reinstate the old overtime rules.

What’s Changed?

The new legislation, which Governor Glenn Youngkin is expected to sign, will take effect July 1, 2022. As of that date, employer liability for unpaid overtime will result only from violations of the FLSA. Likewise, the former three-year statute of limitations will be eliminated in favor of the former two-year statute, and the calculation of overtime pay will be reset to the same formula as that under federal law.

In addition, the new statute will restore the good-faith defense that is part of federal law and functions as an escape hatch for employers that make good-faith mistakes so they can avoid an award of liquidated damages or of an amount that exceeds an employee’s lost wages.

Power of Elections

While the General Assembly rejected other proposed rollbacks to eliminate the ability of local governments to engage in collective bargaining and to limit the scheduled increases in the state’s minimum wage, the reversal of the 2021 Overtime Wage Act with substantial legislative support is a testament to the power of elections. Although Virginia employment laws have become increasingly employee-friendly in recent years, the tide now may be turning. Only time will tell.

M. Jarrad Wright is an attorney with DiMuroGinsberg P.C. in Alexandria, Virginia. Jarrad has participated in all stages of litigation and has experience in a wide range of industries including financial services, oil and gas, defense, and technology. He can be reached at mjwright@dimuro.com.

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