The Virginia Wage Payment Act (“VWPA”) requires employers to pay employees all compensation they are owed and to do so in a timely manner. Among other things, the VWPA requires employers to establish and comply with a pay schedule for employees that meets certain parameters. It also prohibits employers from withholding any part of an employee’s pay (except for taxes or pursuant to law) without the employee’s signed authorization. As of July 2020, the VWPA authorizes employees to file suits in court if an employer fails to pay wages in accordance with the VWPA.
The net effect of these provisions is that employees can sue their employers for failing to pay the full compensation owed to them. The law potentially provides powerful remedies that go beyond what a breach of contract action might provide. For example, if the court finds that an employer knowingly fails to pay wages to an employee in accordance with the VWPA, the court must award the employee triple the amount of wages due and reasonable attorney fees and costs.
Timing of Payments
The VWPA requires employers to establish regular pay periods and rates of pay for all employees except executive personnel. Salaried employees must be paid at least once each month. Hourly employees must generally be paid at least once every two weeks or twice per month. The law provides for a pair of exceptions, where certain students or employees whose weekly wages exceed 150 percent of the Commonwealth’s average weekly wage (as defined in VA Code § 65.2-500), upon agreement by the employee, may be paid once monthly if the employer so chooses.
Importantly, the law provides that at the end of employment the employer must pay the employee all wages or salaries owed on or before the date the employee would have been paid if she had remained employed. VA Code § 40.1-29(A).
Unlawful Withholdings From Pay
The VWPA further prohibits employers from withholding any part of an employee’s wages or salaries (except for payroll, wage, or withholding taxes or in accordance with law), without the written and signed authorization of the employee. VA Code § 40.1-29(C).
Information About Pay, Calculations, and Deductions
The VWPA further requires employers to provide employees with specific information about their pay and any deductions from it, pay rates, hours worked by hourly and some salaried employees, and related information. This information is often provided in paystubs. Specifically, on each regular pay date, the employer (except for certain agricultural employers) must provide to each employee a written statement, by paystub or online accounting, showing the following information:
- Name and address of the employer;
- Number of hours worked during the pay period, if the employee is paid (i) on an hourly basis or (ii) a salary that is less than the standard salary level adopted by regulation of the U.S. Department of Labor pursuant to § 13(a)(1) of the federal Fair Labor Standards Act, 29 U.S.C. § 213(a)(1), as amended, establishing an exemption from the FLSA’s overtime premium pay requirements (currently $684 per week, see 29 C.F.R Part 541);
- Rate of pay;
- Gross wages earned by the employee during the pay period; and
- Amount and purpose of any deductions from the employee’s gross wages.
The paystub or online accounting must include enough information for the employee to determine how the gross and net pay were calculated.
An agricultural employer, upon request of its employee, must provide the employee a written statement of the gross wages earned by the employee during any pay period and the amount and purpose of any deductions. VA Code § 40.1-29(C).
No Contracts Forfeiting Wages as a Condition of Employment
The VWPA further prohibits employers from requiring any employee, except for executive personnel, to sign a contract or agreement that provides for the forfeiture of the employee’s wages for time worked as a condition of employment or continued employment, except as otherwise provided by law. VA Code § 40.1-29(D).
Criminal Provisions and Civil Penalties
The VWPA provides that an employer who “willfully and with intent to defraud fails or refuses to pay wages” in accordance with the VWPA may be subject to criminal penalties, unless the failure to pay was because of a bona fide dispute between the employer and its employee. VA Code § 40.1-29(E). The law also allows the Commissioner of the Virginia Department of Labor and Industry to enforce compliance, VA Code § 40.1-29(F), and provides for civil penalties when an employer knowingly fails to make payment of wages in accordance with subsection A of the VWPA (the timing of payment provisions). VA Code § 40.1-29(H).
If an employer fails to pay wages in accordance with subsection A (the timing of payment provisions), the employer will be liable for the payment of all wages due, and an additional equal amount as liquidated damages, plus interest at an annual rate of eight percent accruing from the date the wages were due. VA Code § 40.1-29(G).
Remedies for Employees and Private Cause of Action
Importantly, the VWPA authorizes employees to file suit in court against an employer who fails to pay wages in accordance with the VWPA. This should include not only violations of the timing of payment provisions but also violations of the withholding-from-pay or other subsections of the VWPA.
The VWPA authorizes both individual and group lawsuits. If an employer fails to pay wages in accordance with the VWPA, the employee may bring an action, individually, jointly with other employers, or on behalf of similarly situated employees as a collective action consistent with the collective action procedures of the Fair Labor Standards Act, 29 U.S.C. § 216(b), to recover payment of the wages.
If the employee or employees prevails, the court must award:
- The wages owed;
- An additional amount as liquidated damages;
- Prejudgment interest at an annual rate of eight percent from the date the wages were due; and
- Reasonable attorney fees and costs.
Triple damages are also possible. If the court finds that the employer “knowingly” failed to pay wages to an employee in accordance with the VWPA, the court must award the employee an amount equal to triple the amount of wages due and reasonable attorney fees and costs. VA Code § 40.1-29(J)&(G).
For purposes of the triple damages provision, the VWPA provides that a person acts “knowingly” with respect to information if the person:
(i) Has actual knowledge of the information;
(ii) Acts in deliberate ignorance of the truth or falsity of the information, or
(iii) Acts in reckless disregard of the truth or falsity of the information.
Notably, establishing that a person acted “knowingly” does not require proof of specific intent to defraud. VA Code § 40.1-29(J).
Statute of Limitations
The VWPA provides that action must be commenced within three years after the cause of action accrued. This limitations period may be tolled upon the filing of an administrative action under VA Code § 40.1-29(F), until the employee has been informed that the action has been resolved or until the employee has withdrawn the complaint, whichever happens first. VA Code § 40.1-29(L).
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