New Virginia Wage Payment Act

Effective July 1, 2020, Virginia employees will have the right to sue in state court for violations of the Virginia Wage Payment Act, VA Code § 40.1-29. Prior to the 2020 General Assembly, the Virginia Wage Payment Act regulated the time and manner in which employers were required to pay their employees, prohibited employers from making certain wage deductions, and limited how an employer could reduce an employee’s compensation. But the law lacked an enforcement mechanism for impacted employees to bring a private cause of action.

That changes effective July 1, 2020. The new legislation provides a private right of action for employees to sue for unpaid wages. The remedies for an employee under the new Virginia Wage Payment Act include not only all wages owed to the employee, but also liquidated damages, prejudgment interest on unpaid wages, and reasonable attorneys’ fees and costs. The liquidated damages provided under the Act gives the employee an award of additional damages equal to the amount of wages owed.

In addition, If an employer knowingly fails to pay wages, the liquidated damages award will equal triple the amount of wages owed. Reasonable attorneys’ fees under the act are set at one-third the amount set forth in the final order or judgment. The action must be filed within three years, but that period will be tolled if the employee decided to seek administrative action first.

Finally, the new law allows employees to joint together to enforce the law in a collective action. The collective action procedures under the law are the same as those provided for by the federal Fair Labor Standards Act.

The new Virginia Wage Payment Act applies to all employers, regardless of size. Additionally, employees are not required to exhaust all administrative remedies before bringing a private cause of action with the Department of Labor and Industry – they can jump straight into court. Considering the broad application and remedial measures available under the new Act, employers will be wise to ensure their payroll practices and procedures are properly maintained.