Virginia Minimum Wage for 2025

Are you curious about Virginia minimum wage for 2025 and whether it is rising with the increasing living costs? According to the Virginia Department of Labor and Industry, the minimum wage in Virginia has increased to $12.41 per hour, effective January 1, 2025. This is a 3.4% minimum wage increase from the previous $12.00 per hour and applies to all tipped and untipped workers. 

This update is tied to inflation through the Consumer Price Index and is part of Virginia’s ongoing commitment to ensure that wages reflect economic conditions. Accurately knowing the minimum wage rate is important for employers, business owners, and employees to ensure legal compliance and uphold fair labor practices. 

In this blog, we will break down Virginia minimum wage for 2025, understand the minimum wage exemptions, future projections, wage laws for specific worker groups, and the best practices for Virginia wage law compliance.

What is Minimum Wage in Virginia?

The minimum wage in Virginia is $12.41 per hour, as of January 1, 2025, until January 1, 2026. This minimum wage is the minimum salary amount employers are legally required to pay workers for their labor. It is adjusted manually according to a set formula by the Virginia Department of Labor and Industry. 

Unlike other states in the United States, this minimum wage also includes tipped workers. But, there are a few employees who are exempt from this minimum wage range, like full-time students who put in less than 20 hours of work time, individuals under 18 employed by close family members, or those who do not come under the US Fair Labor Standards Act.

NOTE: It is to be noted that, according to the official release by the National Conference of State Legislatures, the minimum wage in West Virginia​ is $8.74. This is different from Virginia’s minimum wage, as the two are separate states with distinct labor laws.

Virginia Minimum Wage Increase Timeline 

The minimum salary in Virginia has steadily and intentionally increased throughout the years, reflecting both economic realities and legislative action. Since 2020, the minimum wage by state of Virginia has moved away from the standard federal minimum of $7.25 per hour, aiming to ensure fair compensation for workers across industries. 

Year-by-Year Virginia Minimum Wage Increase Schedule

From 2009 to 2020, the minimum wage in Virginia was $7.25 per hour. It was only after May 1, 2021, that the federal government increased the minimum wage for Virginia to $9.50. Here is a graph showing the Virginia minimum wage history over the years:

What will happen to Minimum Wage in Virginia after 2026?

Do you want to know, “What will Virginia minimum wage be in 2026?” Under the current law, the scheduled increase to Virginia minimum wage 2026 is $13.50. In addition to that, there are several updates upcoming to the minimum wage Virginia employers must follow.  

Mr. Glenn Youngkin, the governor of Virginia, vetoed a bill on the Virginia minimum wage. The bill insisted on the steady Virginia minimum wage increase to $15 per hour by January 1, 2027.

Luis Aguilar, Virginia State Director of CASA, also gave an important statement on the $15 minimum wage Virginia is expecting: 

“The cost of living has become unbearable for too many Virginia families, and this bill is an important step toward making things fairer.”

Updates Concern	Effective Date	Minimum Wage
All Employees who come under the Fair Labor Standards Act	January 1, 2025	$12.41
	January 1, 2026	$13.50
	January 1, 2027	$15.00

For those who are asking, “What is the minimum wage in Virginia after 2028?”, the wage will be calculated annually via the CPI‑U formula.

CPI-U = (Cost of market basket in current year / Cost of market basket in base year) * 100

What are the Minimum Wage Exemptions in Virginia?

Many young, informal, familial, or contract-based roles are exempt from Virginia minimum wage rules. But for most hourly jobs, including those with tips, Virginia requires at least $12.41/hr. Employers must monitor classifications carefully in order to stay compliant, and workers should also be aware of their rights. 

Who is Exempt From Virginia Minimum Wage Laws?

The Virginia Minimum Wage Act (VMWA) excludes various categories of workers who it does not consider “employees”. Here’s a breakdown of those that are not covered under the minimum salary in VA protection:

• Farm laborers or agricultural employees, due to the seasonal and informal nature of the work.
• Caddies on golf courses and taxicab drivers/ operators, often considered independent or commission-based workers.
• Traveling or outside salespeople who are paid by commission.
• Workers under 18 employed by a parent or legal guardian.
• Any person under age 16, regardless of employer.
• Students in full-time education (secondary school, college, or trade school) who work no more than 20 hours per week.
• Students in formal work-study programs tied to their educational institution.
• Babysitters working fewer than 10 hours per week.
• Employees of recreational facilities exempt under federal law (29 U.S.C. § 213(a)(3)).
• Volunteers or workers in nonprofits, religious, educational, or charitable organizations, where there’s no true employer-employee relationship or the work is done voluntarily.
• Individuals in correctional institutions, state hospitals, or training centers.
• Participants in au pair exchange programs (per 22 C.F.R. § 62.31).
• Temporary foreign workers governed by 20 C.F.R. Part 655.
• Workers paid under Section 214(c) of the Fair Labor Standards Act, which includes individuals with certain disabilities who are allowed to be paid subminimum wages.

Minimum Wage Laws for Tipped Workers

The Virginia state minimum wage of $12.41/hour covers both tipped and non‑tipped employees. Employers can take a federal tip credit of $2.13/hour, but only if an employee regularly receives at least $30/month in tips. If tips plus this wage fall less than $12.41, employers must make up the difference.

NOTE: Tip pooling is allowed under Virginia minimum wage law, but it comes with strict conditions. Only employees who regularly receive tips, like servers, bartenders, or bussers, can be included.

Additionally, employers must give written notice to all employees involved in a tip pool to stay compliant with both state and federal regulations.

Living Wage vs. Minimum Wage in Virginia

When discussing wages, fair pay, and ensuring work-life balance, it is important to distinguish between living wage and minimum wage. While the minimum wage in VA is the legally set base pay by the state, the living wage refers to what a person needs to earn to cover essential expenses. Let’s break down how these two terms compare and their noticeable difference.

What is the Living Wage in Virginia?

The living wage in Virginia refers to the minimum income a person needs to afford a basic but decent standard of living. This refers to the gross pay and not the net pay or “take-home” pay. It includes all essential expenses such as housing, childcare, food, healthcare, and transportation. This living wage calculation is applicable for anyone who does not rely on the government or public assistance. 

Living Wage vs. Minimum Wage Comparison

According to the Economic Policy Institute, even in low-cost places like Scott County in Virginia, workers need about $18.58/hour just to afford basic living. This shows a significant gap between the Virginia minimum wage 2025 figures. Here is a detailed comparison of the living wage vs. minimum wage:

1. Living Wage vs. Minimum Wage for 1 Adult:

No. of Children	0	1	2	3
Living Wage	$25.65	$42.46	$53.39	$67.33
Minimum Wage	$12.41

2. Living Wage vs. Minimum Wage for 2 Adults (1 Working):

No. of Children	0	1	2	3
Living Wage	$33.71	$40.51	$44.29	$51.22
Minimum Wage	$12.41

3. Living Wage vs. Minimum Wage for 2 Adults (Both Working):

No. of Children	0	1	2	3
Living Wage	$16.79	$23.60	$29.05	$35.19
Minimum Wage	$12.41

What are the Wage Laws for Specific Worker Groups in Virginia?

Wage laws in Virginia do not apply uniformly to all workers. There are certain job categories and worker groups that are subject to different rules, exemptions, or Virginia minimum wage standards. Understanding how these laws vary by occupation, employment status, or age group is essential for both employers and employees. 

Industry-Specific Minimum Wage Considerations

Nearly all workers in Virginia are paid at least $12.41/hour (in line with federal FLSA standards). However, a few sectors have added complexities like:

1. Retail: Stores, warehouses, and distribution centers must pay all hourly employees at least the current Virginia minimum wage of $12.41 per hour, regardless of part-time or full-time status.

2. Hospitality: Companies must ensure all nonexempt workers are paid the Virginia minimum wage. Tip credits may apply, but must not result in wages below the legal threshold.

3. Apprentices and Trainees: Employers can legally pay the federal minimum wage or 75% of the Virginia minimum wage during the first 90 days of on-the-job or training programs, whichever is greater.

4. Federal Contractors: Workers on federal contracts are subject to $16.20/hour for contracts initiated after January 30, 2022, as mandated by Executive Order 14026.

Employers also need to be mindful of the Virginia minimum wage policies when calculating pay for non-traditional shifts like swing shifts or second shifts. 

Virginia Minimum Wage Enforcement & Penalties

Virginia’s commitment to fair pay includes active enforcement and serious consequences for employers who do not comply. The Virginia Department of Labor and Industry (DOLI) investigates minimum wage complaints under § 40.1‑29. 

Employees can file wage claims online or via mail. They can also claim unpaid minimum and overtime wages, or wage theft. DOLI may then audit employers, review records, and hold informal hearings, leading to penalties and charges.

If an employer is found in violation for not paying the Virginia minimum wage correctly, here is what may happen:

• Unpaid wages: Employers must pay owed wages plus 8% annual interest from when the wages were due. 

• Civil penalties: Virginia law imposes fines between $10 – $200 per violation for minimum wage infractions. 

• Criminal charges: Employers face charges for owing less than $10,000, and felony charges for over $10,000 or repeat violations, punishable by up to 5 years in prison. 

• Joint liability: General contractors may be held responsible for wage violations by subcontractors. 

What are the Additional Virginia State Wage Laws

Apart from the Virginia minimum wage hike that happens periodically, the state’s labor laws also cover essential rights like pay frequency, sick leave, and wage transparency. Here is a breakdown of key protections workers can benefit from:

1. Pay Frequency:

It is important to note the pay periods and frequency in Virginia and across the US. The hourly (non‑exempt) workers must be paid the minimum salary in VA at least twice a month (bi‑weekly or semi‑monthly). While salaried employees or those who earn at least 150% of the average weekly wage receive pay at least monthly.  

2. Paid Sick Leave:

Employees earn 1 hour of paid sick leave for every 30 hours worked, up to 40 hours. If the employer agrees, the employee may use more hours of paid sick leave.  

3. Recordkeeping & Wage Transparency:

Employers must maintain records like pay rates, hours worked, deductions, and final pay details for at least three years. According to § 40.1-28.7:9 under Virginia State Law, employees are legally allowed to discuss wages with colleagues, and employers cannot take action against them for doing so. 

4. Overtime Laws:

Virginia follows federal overtime guidelines under the Fair Labor Standards Act (FLSA). This means that any non-exempt employee working more than 40 hours in a single workweek must be paid at 1.5× their regular hourly rate for each additional hour. There are no Virginia-specific rules for overtime or double time pay, so federal standards apply across all industries.

5. Payroll Deductions:

Virginia law prohibits employers from withholding any portion of wages except for taxes or legal obligations, unless the employee provides written and signed consent.

What are the Best Practices for Virginia Wage Law Compliance?

Complying with wage laws goes far beyond paying the correct Virginia minimum wage per hour. It requires diligent timekeeping, accurate classification of workers, and clear communication of pay policies.

Whether you are running a small business or managing a large workforce, following these best practices can protect your company from wage disputes and ensure fair treatment of employees.

1. Time Tracking & Recordkeeping

Precise timekeeping is the foundation of wage compliance. Virginia employers are required to maintain detailed records of hours worked, wages paid, and any deductions. 

Modern time-tracking software helps automate this process with clock-ins, clock-out systems, and recording breaks in real time. These systems ensure records are easily accessible and audit-ready, which is crucial for staying compliant with the rules for minimum wage VA state has set.

2. Accurate Overtime Tracking

Virginia follows federal overtime law, and it is important for employers to accurately monitor working hours to avoid Virginia minimum wage underpayment or penalties. 

Since it is extremely time-consuming to manually track overtime or fewer working hours, employers can resort to digital time-tracking software to make it simple. These software can precisely monitor work hours and alert employers when an employee works overtime.

3. Calculate Meal & Rest Breaks

While Virginia does not require breaks for employees over 16, it is common practice to offer 30-minute paid meal breaks for shifts that last 6 hours or more. Employers can take the help of time-tracking software to calculate working hours, log break times and durations, ensuring Virginia minimum wage compliance by differentiating between paid and unpaid breaks.

4. Classify Exempt vs. Non-exempt Workers

An exempt employee is a worker who is not eligible for overtime pay or minimum wage protections under the Fair Labor Standards Act (FLSA), due to the nature of their work and compensation.

Proper classification of employees as exempt or non‑exempt is essential for staying compliant with the Virginia minimum wage laws, which follow federal FLSA guidelines. Employers must apply three core criteria to make this distinction:

1. Salary Basis Test:

The employee must receive a consistent salary, not based on hours worked or performance.

2. Salary Level Test:

The employee must earn a weekly salary of at least $1,128. (Effective from January 1, 2025)

3. Duties Test:

The role must primarily involve executive, administrative, or professional duties.

5. Compensation for Holidays

Virginia law does not require private employers to offer paid holidays. However, many companies provide pay for common holidays like Thanksgiving or Christmas. If paid holidays are part of your policy, clearly document them in employment contracts. Public sector workers generally receive two weeks of paid vacation annually.

How Minimum Wage Impacts Small Businesses in Virginia?

Virginia minimum wage laws can significantly affect how small businesses operate, especially in a state where scheduled wage increases are already in motion.

From rising labor costs to changes in hiring practices and pricing strategies, small business owners must navigate these shifts carefully to remain competitive and compliant. Understanding the financial and operational impact is crucial for long-term planning and sustainability.

Common Challenges Employers Face

Small businesses often feel the impact of the Virginia minimum wage increase more acutely than larger corporations. Some of the most common challenges include:

• Increased Labor Costs: Rising wages can impact already-tight payroll budgets, especially for businesses with low profit margins like restaurants, retail shops, and service providers. Employers may need to reduce staff hours or limit hiring to manage the new Virginia minimum wage.

• Price Increases: To accommodate higher labor costs, many small businesses are forced to raise prices on goods or services. While this helps maintain profitability, it can also lead to decreased customer demand.

• Impact on Rural Areas: Small businesses in rural Virginia may face even greater pressure. These areas often have lower average incomes and limited customer bases, making it harder to pass along higher costs to consumers.

• Uncertainty in Tracking Hours: Without accurate time-tracking apps, small businesses may struggle to monitor employee hours effectively. This can lead to overpayment or unintentional non-compliance, especially when managing overtime or part-time shifts.

Adjusting Payroll Budgets

As the Virginia minimum wage rate increases, small business owners in Virginia must make strategic adjustments to their payroll budgets. Key considerations include:

• Administrative Burden: Recalculating wages, updating payroll systems, and ensuring compliance with both state and federal wage laws can increase administrative workload. Employers often need to invest in accurate payroll and time-tracking software to minimize errors and stay compliant.

• Potential Hiring Adjustments: To keep payroll expenses in check, some businesses may need to delay hiring, reduce employee hours, or shift to part-time roles. Others might restructure teams to ensure they can maintain operations without exceeding budget constraints.

• Strategic Budget Planning: Rising labor costs demand more precise payroll forecasting. Business owners may need to evaluate every position, assess productivity levels, and reallocate funds to prioritize high-value roles while staying within financial limits.

Benefits of Paying Above Minimum Wage

Employers who pay above the Virginia minimum wage often report lower turnover, improved employee satisfaction, and a stronger reputation in their local community. When staff feel valued, they are more likely to stay, reducing recruitment and training costs. Moreover, higher wages can attract better applicants and boost morale, leading to increased loyalty.

How to Prepare for Virginia’s Future Wage Changes?

As Virginia moves toward a $15 minimum wage by 2027, preparing in advance can help businesses and employers stay ahead and compliant. Here are some practical strategies to ensure you are ready for upcoming wage adjustments:

1. Audit Employee Wages:

Begin by auditing the current minimum wage in Virginia and the wage rates across all roles and departments. Compare your payroll against the scheduled increases ($13.50 in 2026 and $15.00 in 2027). 

This gap analysis will help you identify the number of employees who will require raises and quantify the total budget impact.

2. Automate Payroll for Future Wage Changes:

Make sure your payroll or HR software is configured to automatically apply the Virginia minimum wage now and future wage rates on the correct dates. 

This reduces manual calculation errors and ensures compliance with scheduled increases and subsequent annual CPI adjustments starting in 2028. 

3. Hold Training Sessions for Managers and HR:

Hold training sessions for managers in HR and payroll regarding the Virginia minimum wage increase and future wage changes. 

Ensuring team members understand when and how pay adjustments occur and the differences between exempt and non-exempt roles prevents missteps and strengthens accountability.

4. Announce Wage Changes to Employees:

Clear and transparent communication builds trust. Announce upcoming wage changes early, explain the reasons behind them, and outline any shifts in scheduling or benefits. 

Proactive engagement helps employees feel valued and reduces anxiety during transitions.

5. Consider Automation:

With the rising Virginia minimum wage rates, businesses and employers can also strategically automate non-essential, manual, or routine tasks that do not require human judgment. 

This includes tasks like inventory management, appointment scheduling, customer service chat, invoicing, and order processing.

Accurately Track Working Hours to Ensure Precise Wage Calculation with Clockdiary

With the increasing Virginia minimum wage ranges, it has become more important than ever for employers to accurately track employee working hours. This ensures that no employees are overcompensated or undercompensated, which could lead to legal issues. 

For that, using powerful time tracking software like Clockdiary is highly beneficial. Here’s how Clockdiary empowers businesses to run accurate payroll, protect employees, and simplify operations:

• Accurate clock-ins and clock-outs

With precise start and end times logged automatically, Clockdiary helps eliminate guesswork and manual entry errors. This ensures employees are paid for every minute they work.

• Overtime detection and compliance

The tool precisely shows when an employee works over 40 hours a week. This guarantees overtime is calculated correctly, without needing to calculate the numbers manually.

• Break management and classification

It records break durations accurately, helping you differentiate between paid short breaks and unpaid break periods. This avoids incorrect wage calculations or compliance issues.

• Timesheet audits and transparency

Timesheet history is stored and accessible, making it easier for managers to review hours, approve work, and resolve disputes. This builds trust between staff and leadership and ensures records are audit-ready.

• Seamless Payroll Integration

Export detailed reports on work hours, expenses, and benefits directly into payroll systems like QuickBooks and ADP. This integration helps streamline wage calculation by reducing manual data entry and minimizing errors.

Frequently Asked Questions: