General Assembly Guts 2021 Overtime Wage Act

In 2021, the 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. This change in law increased the statute of limitations for bringing a claim, an important change in the calculation requirements for overtime pay, and new penalties for employers that do not pay the proper amount.

However, the recent elections resulted in a new General Assembly that has undone these recent changes. During the last legislative session, the House of Delegates and the State Senate both considered and adopted identical bills that effectively repelled the 2021 law. Thirty-two senators and fifty-eight house members from both parties agreed to essentially reinstate the old law.

What’s Changed?
If signed by the Governor, a large section of Virginia Code § 4.01-29.2 that provided for the enhanced employer liability will be stricken and instead, liability will only result from violations of the federal Fair Labor Standards Act. Likewise, the provision for the three-year statute of limitations has been removed in favor of the former two-year statute, and the overtime calculations has been reset to the same as those in the federal act. In addition, the new law has restored the good faith defense that is part of federal law and functions as an escape hatch for employers that make good faith mistakes by allowing courts not to award liquidated damages or an amount that exceeds the lost wages.

Power Of Elections
While other issues such as collective bargaining and minimum wage changes were rejected by the General Assembly, the reversal of this Overtime Wage Act in such as short span of time is a testament to the power of elections. Moreover, Virginia businesses will to have to re-evaluate their business practices again in short order, and employees with lost wage claims will find pursuit of those claims harder in the future.