The Department of Labor and Industry (DOLI) explained in a press release Thursday that the minimum wage in Virginia will increase by 41 cents on Jan. 1. Democrats, however, still wish the governor had not vetoed their legislation this year that would have provided for a larger increase.
The bump-up is a direct result of the legislation passed in 2020 by the General Assembly, which included language to account for inflation.
“Pursuant to the Virginia Minimum Wage Act, the adjusted minimum wage rate shall be a sum of the current minimum wage rate ($12.00 per hour) and a percentage of the current minimum wage rate equal to the change in Consumer Price Index for all items, all urban consumers (CPI-U) for the most recent calendar year, as calculated and published by the United States Bureau of Labor Statistics,” wrote Stephen Clausing, the communications director for the DOLI.
The Customer Price Index is “a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.”
In December 2023, the U.S. Bureau of Labor Statistics published an annual increase in CPI-U of 3.4%
The non-discretionary formula for adjusting the Virginia minimum wage rate is $12.00 + ($12.00 x .034). This calculation equals $12.41 for 2025.
Employers must pay all employees covered by the Virginia Minimum Wage Act “at a rate not less than the adjusted minimum wage rate,” Clausing wrote.
“Annual adjustments to the Virginia minimum wage rate will continue in future years by this same methodology,” he continued.
Gary Pan, the commissioner of DOLI, recently sent a letter explaining the change to business leaders across the commonwealth.
“The Code of Virginia requires this adjustment determination be complete by October 1, 2024,” Pan wrote. “I am aware that many businesses establish their budgets during the summer prior to the new year so we are providing advanced notice of this change to minimize negative impacts.”
Democrats are pleased with the 41-cent increase but argue it could have been higher.
The General Assembly passed legislation during their session earlier this year that would have increased the minimum wage to $13.50 in 2025 and $15 in 2026, but Gov. Glenn Youngkin vetoed the bill.
Del. Jeion Ward, D-Hampton, chairs the House Labor Committee and sponsored HB 1, the bill that would have increased the minimum wage.
“During this session, we had a retiree contact my office, thanking us for carrying HB 1,” Ward said during an interview Friday. “She told us that she works in a grocery store because she has a hard time keeping up with her normal expenses and paying for her prescription drugs.”
Ward says she also knows a woman who works two minimum-wage jobs to afford a babysitter for her child.
Senate Majority Leader Scott Surovell, D-Fairfax, echoed Ward’s sentiment.
“I’m pleased the minimum wage is going up but the increase would have kept pace with inflation if Governor Youngkin would have not vetoed our $15 minimum wage that is popular with 80% of Virginians,” he said.
Youngkin has stated that he believes a uniform increase across the commonwealth ignores the economic differences in localities.
“Implementing a $15 per hour wage mandate may not impact Northern Virginia, where economic conditions create a higher cost of living, but this approach is detrimental for small businesses across the rest of Virginia, especially in Southwest and Southside,” he said at the time of his veto on the minimum wage increase. “A one-size-fits-all mandate ignores the vast economic and geographic differences and undermines the ability to adapt to regional cost-of-living differences and market dynamics.”
The Virginia state director for the National Federation of Independent Business, Julia Hammond, was unavailable to speak on Friday about the 41-cent increase, but she applauded Youngkin’s veto of the minimum wage increase earlier this year.
“HB1/SB 1 was a solution in search of a problem,” she wrote in a statement. “Our members, many of whom already are paying well above the minimum wage to recruit and keep a strong workforce, are in the best position to decide how much they can afford to pay. Raising the state minimum wage would have put pressure on employers to pay more to stay competitive and forced small businesses to raise prices to cover the costs of the mandate or try to get by with fewer workers. Inflation already is making it harder to own, operate, and grow a small business. Raising the minimum wage would have made a bad situation even worse.”