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Virginia Overtime Wage Act
Beginning July 1, Virginia employers will be subject to the Virginia Overtime Wage Act (“Overtime Act”), which
adds new state overtime pay requirements. Previously, Virginia employers applied the overtime pay
requirements of the federal Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq. Like the FLSA, the
Overtime Act obligates employers to pay one and one-half times an employee’s regular rate of pay for hours
physically worked in excess of 40 in a workweek. Differences from the federal law include how the regular rate
of pay is calculated for salaried nonexempt employees, a longer statute of limitations to bring potential claims,
and the possible damages available. The Overtime Act also waives sovereign immunity for the Commonwealth.
I. RATE CALCULATIONS
Under the FLSA, an employee’s regular rate of pay is the sum of all remuneration for employment
(barring certain statutory exclusions) divided by total hours worked in a workweek. The FLSA makes
clear that this calculation includes “the total number of hours actually worked”. Thus, the FLSA
makes no distinction in calculating the regular rate of pay for hourly and salaried workers.
The calculation for hourly employees does not change from the FLSA: the regular rate of pay is the
hourly rate plus any other non-overtime wages paid or allocated for the workweek—not counting
the same items that would be excluded from the FLSA calculation—and then divided by the total
number of hours physically worked in the workweek.
The Overtime Act employs a different calculation for nonexempt salaried employees. For
employees who are salaried or paid on some other regular basis, the regular rate of pay is one-
fortieth (0.025) of all wages paid —not counting the same items that would be excluded from the
FLSA calculation—for the workweek regardless of the number of hours the employee worked.
Overtime calculations still apply to hours actually worked in excess of 40; vacation or sick leave
hours continue to be excluded from the 40 hour threshold.
* See page 2 for a rate calculation example.
Employers also may face greater liability for misclassifying employees as exempt under the new law.
Under federal law, employers commonly argue that a misclassified employee’s salary already covers
the employee’s straight-time wages for all hours worked and, therefore, only the additional “half-
time” amount is owed for hours over 40. The Overtime Act eliminates this defense, providing
instead that all salaried (nonexempt) employees are entitled to one and one-half times their regular
rate for any hours worked over 40.
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Lastly, employers cannot provide compensatory leave or overtime leave instead of overtime pay
except for Law Enforcement and Fire Suppression employees as set forth in subsection A of § 9.1-
701. The Overtime Act 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.”
Rate Calculation Example:
II. IMPACT ON FIREFIGHTER AND POLICE OFFICERS
Currently, political subdivisions of the Commonwealth must pay fire fighters and police officers on
forces with 100 or more officers overtime pursuant to Va. Code § 9.1-701. This closes the “gap”
created by the employee’s regular schedule of employment and the 86–hour federal overtime
trigger established by 29 U.S.C. § 207(k) (FLSA). See Rogers v. City of Richmond, 851 F. Supp. 2d at
986-987 (E.D. Va. 2012) (“Simply put, an employee who works more than their normal hours, but
less than the FLSA maximum, is entitled to overtime under state, but not federal, law.”). Thus, the
practice of paying “straight time” rather than a premium rate for the “gap” of hours worked
between 80 and 86 in a 14–day work cycle violates § 9.1–700 et seq. of the Virginia Code.
The Overtime Act does not impact those that comply with Code § 9.1-701. The Overtime Act
specifically states that any agency or public body that complies with the requirements of 29 U.S.C. §
Semi-Monthly (S/M)
$1500
Total Hours Worked
42
S/M Standard Hours
86.67
Work Cycle Hours
40
Hourly Rate
$17.31
Addl. Comp Subject to
Inclusion in OT Rate –
Semi-Monthly Rate
$500
Addl. Comp Subject to
Inclusion in OT Rate –
Weekly Rate
$230.77
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207(k) and § 9.1-701 will not have violated the provisions of the Overtime Act “with respect to fire
suppression or law-enforcement employees covered by such statutes.”
Thus, the Overtime Act does not impose any additional obligation on public sector employers to
pay overtime to fire suppression and law-enforcement employees for those public employers in
compliance with § 9.1-701.
III. SOVEREIGN IMMUNITY
In defining “person,” the Overtime Act waives the Commonwealth’s sovereign immunity.
"Person" means an individual, partnership, association, corporation, business trust, legal
representative, any organized group of persons, or the Commonwealth, any of its constitutional
officers, agencies, institutions, or political subdivisions, or any public body.
Meaning, state agencies can now be sued under the Overtime Act.
IV. STATUTE OF LIMITATIONS
The new law provides that an employee’s overtime claim may include workweeks in a total span of
up to three years, rather than the FLSA’s default two-year limitations period (three years for willful
violations). Claims under the Overtime Act will not apply to violations that occurred prior to the
effective date of the law: July 1, 2021.
V. LIQUIDATED DAMAGES
While the FLSA provides for liquidated damages equal to the amount of unpaid overtime wages, an
employer may defend against such a damages claim on the basis that it acted in good faith, with
reasonable grounds for believing it acted in compliance with the FLSA’s requirements. This defense
is unavailable under the new law, providing instead that all overtime wage violations are subject to
double damages—plus pre-judgment interest at eight percent a year. In addition, the law provides
for treble damages for “knowing” (willful) violations.
VI. COLLECTIVE ACTIONS (CLASS ACTION)
The Overtime Act amends existing sections of the Virginia Code accompanying the new law to
authorize collective actions “consistent with the collective action procedures of the Fair Labor
Standards Act” for violations under the Overtime Act. Thus, state agencies face the possibility of
defending overtime claims of multiple employees in a collective lawsuit covering workweeks up to
a three-year period.
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IMPACTS TO DHRM POLICY
Current Overtime Leave and Compensatory Leave Polices will be updated subject to the changes to this bill. The
amended policies will be published in advance of the effective date of July 1st.
ADDITIONAL RESOURCES
This bill was assigned to the Virginia Department of Labor & Industry (DOLI) for review during the General
Assembly session. DOLI has developed related FAQs and posted them on their website.
https://www.doli.virginia.gov/labor-law/faqs-virginia-overtime-law/
For questions regarding the Virginia Overtime Wage Act, please contact the Compensation Group.
