General Assembly Adopts Governor’s Amended Budget Language Addressing Primary Overtime Compensation Concerns

August 11, 2021

The General Assembly approved language and added additional language to Governor Ralph Northam’s budget amendments addressing the Department of Labor and Industry’s (DOLI) interpretation of Delegate Mike Mullins’ HB 2063, which was passed earlier this year. The DOLI interpretation overturned the longstanding provision of the Fair Labor Stands Act that allowed public agencies to offer compensatory time in lieu of pay for overtime. This budget amendment language addresses the multi-million-dollar fiscal impact that the DOLI interpretation would have on local governments and thousands of public employees.

The Governor’s budget included language in his introduced amendments suggested by VACo that specifically states the terms “Wages” and “Pay”  shall also mean overtime compensatory time in lieu of wages for overtime pay by public agencies as provided by certain provisions the FLSA. This language was further amended by the budget conference to clarify that individuals who volunteer to perform services for a public agency are not considered employees under VOWA if such services are not the same type of services for which the individual is employed to perform for such public agency. Additional language clarified that an employer may exert an exemption to the overtime requirements of VOWA for employees who meet the exemptions set forth in certain provisions of the FLSA.

Governor Northam signed the provisions of the amended budget on August 10, and they take effect immediately. However, amendments to Virginia Overtime Wage Act will be necessary in the 2022 General Assembly session to provide a long-term solution to this issue beyond the conclusion of Fiscal Year 2022, when the budget language will expire. VACo thanks our members for the information and advocacy efforts made in response to our June 25 Capitol Contact Alert.

VACo appreciates the efforts of Governor Northam, Delegate Mullin, and the General Assembly for diligently working to correct an unintended consequence of legislation from the 2021 regular session, and we look forward to working with everyone to ensure a successful outcome for local governments in the 2022 session.

VACo Contacts: Jeremy R. Bennett and Phyllis Errico, Esq.

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