Earlier this month, the Virginia Overtime Wage Act (VOWA) went into effect. The new law resembles the federal Fair Labor Standards Act (FLSA) in that it requires employers to pay employees an overtime rate of 1.5 times their regular rate for all hours worked in excess of 40 in a given workweek. However, the VOWA differs from the FLSA in a few important respects, and Virginia employers would be wise to understand their new obligations.
- Under the FLSA, an employee’s regular rate of pay is calculated by taking their weekly salary and dividing it by the number of hours they worked that week. Under the VOWA, on the other hand, an employee’s regular rate is calculated by dividing their weekly salary by 40, regardless of how many hours the worked. As a practical matter, this means that overtime owed under the VOWA will be higher than overtime owed under the FLSA.
- Under the FLSA, the statute of limitations is two years, except in cases of willful violations, which provide for a three year statute of limitations. Under the VOWA, the statute of limitations is three years, regardless of whether the violation was willful or not.
- The FLSA provides for liquidated damages equal to the amount of unpaid overtime. However, employers can avoid paying these liquidated damages if they can prove that they withheld overtime “in good faith.” No such defense is available under the VOWA, however, and employers are subject to double damages even if they had a reasonable belief that they were in compliance with the law. In fact, employers are subject to triple damages in the event of knowing violations of the VOWA.
Because employers’ obligations are greater under the VOWA than under the FLSA, employers in Virginia need to reassess their overtime policies to ensure that they are in compliance with the new law. If you have any questions about the Virginia Overtime Wage Act, or any area of employment law, contact Thatcher Zavaro & Mani at 301-850-1246. www.ThatcherLaw.com. Follow us on: