Despite a Veto, Virginia Minimum Wage Will Increase in 2025

As you may recall from our earlier alert on the (few) upcoming changes to Virginia’s Employment Laws, several bills, including those designed to reenact scheduled increases to the minimum wage rate (HB 1 and SB 1), failed to become law. That failure, however, is not the end of the story; the current Virginia Minimum Wage Act (the “Act”) (§ 40.1-28.10) provides the “Commissioner of Labor and Industry will establish the adjusted state hourly minimum wage… by October 1, 2024, and annually thereafter.” Thus, the commissioner is directed by law to “set the adjusted state hourly minimum wage that is in effect on the date such adjustment is made and a percentage of the amount in clause (i) that is equal to the percentage by which the United State Average Consumer Price Index for all items, all urban consumers (CPI-U) ….” (§ 40.1-28.10(F)). 

The current (2024) state minimum wage rate is $12.00 per hour. Per the U.S. Department of Labor, Bureau of Labor Statistics, the average Consumer Price Index for all items, all urban consumers (CPI-U) is 3.4%. Thus, the new adjusted minimum wage in Virginia is $12.00 plus 3.4% of $12.00, for a total of $12.41 per hour. This new rate will be in effect from January 1, 2025, until January 1, 2026. Absent any new laws or amendments to the Act, this same methodology will be used in future years to set Virginia’s annual minimum wage rate. Employers should review their current pay rates and ensure that any worker earning less than $12.41 per hour is increased to at least that rate by January 1, 2025.