Virginia Overtime Wage Act Creates Substantial Exposure for Employers and Greater Availability of Damages for Employees
June 21, 2021
The new Virginia Overtime Wage Act (VOWA) will go into effect July 1, 2021, and similar to the federal Fair Labor Standards Act (FLSA), the VOWA requires employers to pay nonexempt workers overtime at a rate of one-and-a-half times their regular rate of pay for any hours worked over 40 hours in a single workweek.
The VOWA is more favorable to employees than the FLSA in three notable respects:
(1) The VOWA has a 3 year statute of limitations, whereas the FLSA has a 2 year statute of limitations, with a 3 year statute of limitations only available if the employee can prove the violation was willful.
(2) The VOWA provides for greater remedies than the FLSA. The VOWA makes liquidated damages automatic, whereas the FLSA provides employers with a good faith defense against liquidated damages. Additionally, the VOWA allows for treble damages for "knowingly" failing to comply, however, those damages are not available under the FLSA.
(3) As to nonexempt salaried workers, the VOWA calculates the worker's regular rate of pay as one-fortieth of all wages paid for a particular week (regardless of the number of hours worked) and requires time-and-a-half overtime pay, whereas the FLSA calculates the worker's regular rate of pay by dividing the salary by the total number of hours worked and allows overtime pay as half-time only.
Fluctuating workweeks likely do not comply with the VOWA, and any piece rate and day rate arrangements should be reevaluated to ensure compliance with the VOWA. There are exemption defenses available to employers for employees that are executive, administrative, professional or outside sales, among others. The VOWA also expressly authorizes collective actions.
Paycheck Protection Program Extension Act of 2021 Extends the Program until May 31, 2021
April 6, 2021
Businesses can now apply for a PPP loan until May 31, 2021, with an additional thirty (30) days provided for the Small Business Administration to process applications that are still pending.
Extended COVID-19 Related Leave Provisions Provided For Under the American Rescue Plan Act of 2021
March 16, 2021
On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (the Plan), which expanded the availability of paid leave previously provided through the Families First Coronavirus Relief Act (FFCRA). The Plan allows an employer to voluntarily provide Emergency Sick Leave (ESL) and Emergency Family and Medical Leave Act Leave (EFMLA), and to claim the related tax credit for the wages associated with the use of that leave, between April 1, 2021 through September 30, 2021.
The FFCRA provided for paid leave for these qualifying reasons:
to comply with a federal, state, or local quarantine or isolation order related to COVID-19;
to self-quarantine if advised to do so by a healthcare provider;
to obtain a medical diagnosis if experiencing COVID-19 symptoms;
to care for an individual required to be quarantined if that individual is subject to a quarantine or isolation order or has been advised by a medical provider to self-quarantine; or
to care for your child if the child's school or child care center is closed due to COVID-19.
The Plan now allows the 10 days of paid leave under the ESL and the 12 weeks of paid leave under the EFMLA to also be used for these additional qualifying reasons:
obtaining a COVID-19 vaccine;
recovering from an injury, disability, illness or condition related to a COVID-19 vaccination; or
seeking or awaiting results of a COVID-19 test or diagnosis either because the employee has been exposed or the employer requested the test or diagnosis.
Beginning April 1, 2021, employees have access to a new bank of 10 days of ESL and are therefore eligible for this leave even if they have previously taken 10 days of paid leave under the ESL.
The first two weeks of the EFMLA no longer need to be unpaid.
U.S. Department of Labor Delays Effective Date of New Tip Pool and Tip Credit Regulations
March 1, 2021
On February 24, 2021, the U.S. DOL announced it would delay until April 30th the implementation of the tip pool and tip credit regulations that were set to go into effect on March 1st. The new regulations would allow non-tipped employees to be paid as little as $2.13/hr and be included in a tip pool to receive tips that would compensate them up to the higher minimum wage. These regulations would also remove limits on how many hours of non-tipped work a tipped employee can perform while being paid at a rate of $2.13/hr. Finally, the regulations include new recordkeeping and notice requirements for employers. It is anticipated that these regulations will assist employers in the service industry struggling during the COVID-19 pandemic.
Robust Avenue to Recover Unpaid Wages Under the Virginia Wage Payment Act
March 1, 2021
Employees in Virginia can now file suit in state court to recover unpaid wages, bonuses and commissions. If successful, the employee could recover not only the unpaid wages, but also liquidated damages (up to three times the amount of unpaid wages for knowing violations), prejudgment interest, and reasonable attorneys' fees and costs. An employer acts knowingly if it has actual knowledge, deliberately ignores the truth or recklessly disregards the truth.