How do you calculate overtime pay in Virginia?

Calculating Virginia overtime pay involves understanding federal and state regulations that govern how employees should be compensated for working beyond the standard 40-hour workweek. Virginia’s approach to overtime pay is primarily aligned with the federal Fair Labor Standards Act (FLSA). These regulations ensure that workers receive fair compensation for the extra time they contribute, with particular rules applying to various employment categories, such as hourly, salaried, tipped, commission-based, and piece-rate employees.

This article provides a comprehensive guide on calculating overtime pay, covering eligibility, exemption, and specific calculations for different types of employees.

Which Overtime Laws Apply in Virginia?

Overtime in Virginia is primarily governed by federal law under the Fair Labor Standards Act (FLSA). The FLSA establishes the standards for overtime pay, requiring that non-exempt employees receive overtime pay at a rate of one and one-half times their regular rate of pay for all hours worked over 40 in a workweek.

In addition to federal law, Virginia has enacted its state-specific legislation related to wage and hour issues, including overtime. The Virginia Overtime Wage Act (VOWA), which became effective in July 2021, initially introduced differences in how overtime was calculated, particularly for salaried non-exempt employees. Specifically, VOWA initially required a different calculation method, using a 0.025 multiplier, which diverged from the federal standards.

However, significant amendments to VOWA in 2022 brought the state’s overtime calculation methods back in line with federal standards. Under the current provisions of VOWA, employers in Virginia must pay employees overtime wages in accordance with the FLSA, using the standard one and one-half times (1.5) the employee’s regular rate of pay for hours worked over 40 in a workweek.

How Much is Overtime Pay in Virginia?

Overtime pay in Virginia is calculated at a rate of one and one-half times the employee’s regular rate of pay. This applies to all hours worked over 40 in a single workweek. For example, if an employee’s regular hourly rate is $20, their overtime rate would be $30 per hour ($20 x 1.5).

To learn more, check out our guide on Virginia Overtime Laws. 

Who is Eligible for Overtime Pay in Virginia?

In Virginia, non-exempt employees are eligible for overtime pay. This typically includes most hourly workers and some salaried employees who do not meet the criteria for exemption under the FLSA and VOWA. To qualify for overtime pay, these employees must work more than 40 hours in a workweek.

Check out our guide on Overtime Rights in Virginia.

Hourly employees are compensated based on the number of hours they work each week. If they work more than 40 hours in a single workweek, they are entitled to overtime pay at a rate of one and one-half times their regular hourly rate. To calculate overtime for hourly employees, employers have to:

• Identify the employee’s regular hourly rate.
• Multiply the regular hourly rate by 1.5 to determine the overtime rate.
• Multiply the overtime rate by the number of overtime hours worked to calculate the total overtime pay.

If an hourly employee earns $15 per hour and works 45 hours in a week, their overtime rate would be $22.50 per hour ($15 x 1.5). For the five hours of overtime, the employee would earn an additional $112.50 ($22.50 x 5).

Read our guide on Your Rights as an Hourly Employee in Virginia to learn more.

Salaried employees in Virginia can be either exempt or non-exempt from overtime, depending on their duties and salary level. For non-exempt salaried employees, overtime pay is calculated based on their salary and the number of hours they work in a week. To calculate overtime of salaried employees, employers have to:

• Determine the employee’s weekly salary.
• Divide the weekly salary by 40 hours to determine the regular hourly rate.
• Multiply the regular hourly rate by 1.5 to calculate the overtime rate.
• Multiply the overtime rate by the number of overtime hours worked to calculate the overtime pay.

If a non-exempt salaried employee earns $800 per week and works 50 hours in a week, the regular hourly rate would be $20 ($800 / 40 hours). The overtime rate would be $30 per hour ($20 x 1.5). For the ten overtime hours, the employee would earn an additional $300 ($30 x 10).

Check out our guide on Your Rights as a Salaried Employee in Virginia.

Tipped employees receive a base wage often lower than the standard minimum wage because their earnings are supplemented by tips. However, when calculating overtime, the employee’s regular rate of pay must include the total of the hourly wage plus any tips received. To calculate the overtime pay for tipped employees, employers have to:

• Determine the employee’s regular pay rate, which includes the base wage plus an average of the tips earned.
• Multiply this regular rate by 1.5 to determine the overtime rate.
• Multiply the overtime rate by the number of overtime hours worked to calculate the total overtime pay.

If a tipped employee has a base wage of $2.13 per hour, earns $10 per hour in tips, and works 45 hours in a week, the overtime calculation would be based on a regular rate of $12.13 ($2.13 + $10). The overtime rate would be $18.20 per hour ($12.13 x 1.5), and the employee would earn $91 ($18.20 x 5) in overtime pay for 5 hours of overtime.

Commission employees are paid based on sales or other performance metrics. To calculate overtime for commission employees, employers have to:

• Add the employee’s total weekly earnings from both salary and commissions.
• Divide the total earnings, including commissions, by the weekly hours worked to determine the regular rate.
• Multiply the regular rate by 1.5 to find the overtime rate.
• Multiply the overtime rate by the number of overtime hours worked to calculate the total overtime pay.

If a commission employee earns a total of $800 in a week (including salary and commissions) and works 50 hours, their regular rate is $16 per hour ($800 / 50 hours). The overtime rate would be $24 ($16 x 1.5), and for ten overtime hours, the employee would earn $240 ($24 x 10).

Piece rate employees are paid based on the number of units they produce rather than an hourly wage. To calculate overtime for piece rate employees, employers have to:

• Determine the total earnings of the week based on the number of pieces produced.
• Divide the total earnings by the total hours worked to find the regular rate of pay.
• Multiply this regular rate by 1.5 to determine the overtime rate.
• Multiply the overtime rate by the number of overtime hours worked to calculate the total overtime pay.

If a piece rate worker earns $600 for producing 200 units and works 50 hours in a workweek, their piece rate is $3 per unit ($600 / 200 units), and their regular rate is $12 per hour ($600 / 50). The overtime rate would be $18 per hour ($12.15), and for 10 overtime hours, the employee would earn an additional $180.

The statute of limitations for claiming unpaid overtime in Virginia is two years from the date the violation occurred. However, if the violation is found to be willful, the statute of limitations extends to three years. This means that employees have up to two or three years, depending on the nature of the violation, to file a claim for unpaid overtime wages.

In Virginia, employers must maintain accurate records of all hours worked by employees and the wages paid, including overtime. The key recordkeeping requirements for overtime wage compliance include:

• Records of each employee’s name, address, occupation, and date of employment.
• Non-exempt employees must maintain detailed records of the total hours worked each day and each workweek, including both regular and overtime hours.
• Documented employee wages, including regular pay, overtime pay, bonuses, and other compensation forms. Records should show the rate of pay and how overtime is calculated.
  Records of the specific pay periods and the corresponding wages paid for each period.
  Acceptable methods for recording hours worked including time clock software, timesheets, and other reliable time tracking systems.

Employers are required to retain these records for at least three years. This ensures they can provide evidence of compliance with wage and hour laws if needed. Failure to comply and maintain these records can result in penalties and make it difficult for employers to defend against claims for unpaid wages or overtime.