Virginia employers are at increased risk of class action wage litigation following passage of the Virginia Overtime Wage Act.

“Previously, Virginia had been content to rely on the overtime pay requirements of the federal Fair Labor Standards Act (FLSA),” note Kristina H. Vaquera and Shaun M. Bennett in a recent Jackson Lewis legal alert discussing the new statute, which Governor Ralph Northam signed into law on March 31, 2021. Like the FLSA, the Virginia Overtime Wage Act obligates employers to pay one and one-half times an employee’s regular rate of pay for hours worked in excess of 40 in a workweek. Also like the FLSA: Beginning July 1, 2021, employees will be entitled to pursue state-law overtime claims as collective actions.

Virginia law typically does not authorize class or collective actions. However, there are exceptions, and the Virginia Overtime Wage Act is now one of them. Amendments to existing sections of the Virginia Code accompanying the new law authorize collective actions “consistent with the collective action procedures of the Fair Labor Standards Act” for violations under the Virginia Overtime Wage Act.

In addition, the Virginia law departs from the FLSA in several important, employee-friendly ways, including a lengthier limitations period to bring potential claims (three years is the default liability period), and the availability of greater damages. (The Virginia law also differs from the FLSA in how the regular rate of pay is calculated.) The bottom line is that Virginia employers face the possibility of defending overtime claims of multiple employees in a collective lawsuit covering workweeks up to a three-year period.

The Virginia Overtime Wage Act creates the potential for significant liability to employers that fail to properly classify and compensate their employees. Employers operating in the state should review their overtime pay practices to ensure compliance with both the FLSA and the new Virginia law.

The detailed discussion of the Virginia law can be found here.