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Minimum wage legislation conference report

The House and Senate have agreed on the details of legislation to raise the minimum wage for workers in Virginia from the current rate of $7.25 per hour to $9.50 per hour beginning on January 1, 2021. The conference report for HB 395 (Ward)/SB 7 (Saslaw) represents a compromise between the House and Senate, a majority of whose members had previously committed to raising the minimum wage, but had disagreed on the details of doing so. The legislation now awaits action by Governor Ralph Northam.

As previously reported, both the House and Senate bills going into conference incrementally raised the state’s minimum wage, but significant differences remained between the legislation. These differences mainly consisted of how soon to begin the incremental increases, the establishment of wage regions based on similar median household incomes and the costs of living, and the types of employees exempted from the provisions of the wage increases. The House version took a more aggressive approach in its timelines for implementation, while the Senate proposed the regional wage system.

The bill as it leaves conference resolves these differences and proposes to increase the minimum wage to $9.50 per hour on January 1, 2021, then to $11 per hour on January 1, 2022, and $12 per hour on January 1, 2023. Beginning on January 1, 2022 the Virginia Department of Housing and Community Development (DHCD), the Virginia Economic Development Partnership Authority, and the Virginia Employment Commission are directed to conduct a joint review of the feasibility and potential impact of instituting a regional minimum wage that shall consider factors such as cost of living, impact to employers, and the experience of other states that have implemented a minimum wage, among other factors. The agencies are directed to submit their report to the General Assembly by December 1, 2023.

The conference report legislation also includes a re-enactment clause that prevents further incremental state-wide increases of the minimum wage to $13.50 per hour by January 1, 2025, and $15 per hour by January 1, 2026, unless the General Assembly votes to do so prior to July 1, 2024. If the General Assembly fails to re-enact these clauses, the Commissioner of Labor and Industry is directed to establish by October 1, 2026, an annually adjusted state hourly minimum wage pegged to the United States Average Consumer Price Index for all items, all urban consumers (CPI-U).

VACo Contact: Jeremy R. Bennett

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