,

New Changes to Virginia’s Minimum Wage and Earned Income Tax Credit Laws

Virginia-Business-Skyline_1200x647pxls
08
May

If you haven’t updated your Virginia employment law posters yet this year, now is the time. There are several changes to Virginia law that your employees need to know about—and your labor law posters are where they look for that information.

 

Virginia Minimum Wage

The minimum wage in Virginia is on the rise, with an eventual goal of $15 an hour in 2026—more than twice the previous rate of $7.25 an hour. Beginning May 1, 2021, the minimum wage is now $9.50 an hour. Employees who earn over $30 per month in tips can still be compensated at the lower federal Fair Labor Standards Act tipped rate of $2.13 per hour.

The minimum wage is scheduled to increase as follows:

  • January 1, 2022: $11.00 per hour,
  • January 1, 2023: $12.00 per hour,
  • January 1, 2025: $13.50 per hour, and
  • January 1, 2026: $15.00 per hour.

The new minimum wage law also provides for a lower “training wage” for employees who are “on-the-job” or other training programs. The training wage must be at least 75 percent of the standard $9.50 minimum wage, or $7.125 per hour, and it cannot be applied for more than 90 days. This training wage will increase with the minimum wage.

 

Virginia Earned Income Tax Credit (EITC)

Virginia’s Department of Social Services notes that the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) may “help families to stabilize their financial situation” during the ongoing uncertainty of the coronavirus pandemic. The EITC allows working people who earn less than $56,844 to earn up to $6,660 in tax credit. The maximum amounts apply to married employees who file joint tax returns and have three or more qualifying children. To qualify for the EITC, employees must not have received more than $3,650 from investment income during the tax year.

In a new provision, employees may use either their 2019 earned income or their 2020 income to calculate their tax credits.

Virginia also notes that those who qualify for the EITC can also have their taxes prepared for free either online or virtually. To learn more about scheduling a remote appointment with an IRS-certified volunteer, Virginia employees can call 2-1-1.

 

How to Keep Up With Labor Law Changes in Virginia

Do you need new minimum wage and tax credit posters for your Virginia business? Check out the Virginia page on our website to order new labor law posters that reflect the latest wage and hour law changes.

Given the scheduled yearly changes to Virginia’s minimum wage, we encourage you to sign up for an annual subscription to our compliance plan. The compliance plan ensures that you automatically receive free poster updates for any mandatory law changes throughout the year. And with an annual subscription, you’ll receive new posters each year, so you can effortlessly keep up with the scheduled changes in Virginia’s mandatory minimum wage. Poster Compliance Center is the easiest way to keep your business in compliance!