VA Minimum Wage To Increase To $12 An Hour Starting Jan. 1

VIRGINIA — Some workers across Virginia will see an increase in pay beginning next week, as the state works toward a minimum wage of $15 per hour, which would take place on Jan. 1, 2026, if approved by lawmakers.

The current rate of pay for minimum wage workers across Virginia is $11 per hour and the new minimum wage will increase to $12 on Sunday.

Virginia is one of 23 states across the nation that is increasing its minimum wage on Jan. 1. Four more states and Washington, D.C., have increases scheduled for later in 2023.

In 2021, the median household income for Virginia was $80,963 in 2021, the latest figures available according to the Census ACS 1-year survey. Compared to the median US household income of $63,445 a year, Virginia median household income is $17,518 higher.

Virginia's current and future minimum wages are:

• $11 on Jan. 1, 2022
• $12 on Jan. 1, 2023
• $13.50 on Jan. 1, 2025 (needs approval)
• $15 on Jan. 1, 2026 (needs approval)

Virginia's minimum wage increase is part of a law passed in 2020. Subsequent increases to $13.50 in 2025 and $15 in 2026 will occur if the General Assembly enacts them again by July 1, 2024.

In D.C., voters passed Initiative 82 in November, which requires District employers to pay $16.10 an hour to tipped employees regardless of how much they earn in gratuity, FOX reported. Currently, tipped workers make $5.35 an hour if they make enough tips to meet the $16.10 threshold.

On Jan. 1, 2023, the minimum wage for tipped DC workers is slated to increase to $6 an hour; the pay hikes will be phased in over five years. However, the measure can only take effect after a 30-day period of congressional review, which has not yet taken place, FOX said.

The federal minimum wage has remained at $7.25 an hour since July 24, 2009 — the longest period in history without a raise.

Among the state's set increase the minimum wage in the New Year, California’s increase will make its workers the second highest-paid minimum wage employees in the country, with an hourly rate of $15.50 per hour.

Business for a Fair Minimum Wage coalition noted that most business owners are in favor of the increases as they'll help boost consumer spending, strengthen local economies and help improve employee hiring, retention and productivity.

“Minimum wage increases are a great boost for the new year,” said Holly Sklar, CEO of Business for a Fair Minimum Wage. “These needed raises don’t stay in workers’ pockets. They energize communities, as workers and their families have more to spend at local businesses. Minimum wage raises also pay off in lower employee turnover, increased productivity and better customer service, which strengthens small business competitiveness."

Gina Schaefer, who owns 12 Ace Hardware stores across Maryland, Virginia and D.C., said the minimum wage will ultimately boost her business' success, too.

“Minimum wage increases go right back into the economy as spending at local businesses like ours. And investing in employees is the best investment a business can make. Customers have a lot of choices and they come back to businesses where employees are happy to work and deliver great customer service," Schaefer said.

The Economic Policy Institute said that because of long-standing discrimination and occupational segregation, the most concentrated effects are seen among:

• Hispanic or Latino workers, 21.8 percent (20.1 percent of the workforce);
• Black workers, 12.2 percent (9.5 percent of the workforce);
• Multiracial and Native American workers, 14.4 percent (2 percent of the workforce).

The minimum wage increases will “have a meaningful impact on workers struggling to make ends meet,” the think tank said in its release, noting that 23.2 percent of affected workers have incomes below the poverty line, and another 26.5 percent have incomes below twice the poverty line.

Other highlights from the report:

• About 55 percent of affected workers are those 25 and older, and nearly half (45 percent) work full time. Most of the affected workers have a high school diploma or less education, but about 41 percent have at least some college.
• More than 2 million parents will get a raise, including more than 1 million single parents. It’s estimated more than 5.7 million children live in households that will see an increase in earnings in 2023.
• When the changes take effect, the state with the highest minimum wage will be Washington, with a starting hourly rate of $15.74.
• The smallest increase will be in Michigan, where the minimum wage goes up 23 cents to $10.10 an hour.
• The biggest rate hike is in Nebraska, with a $1.50 an hour increase to $10.50 an hour.

The tipped-wage minimum is $2.13 per hour.

According to a separate report from the Economic Policy Institute, more than a dozen states pay non-tipped employees at that rate. Among those states, some have increased the tipped wage above the federal minimum, notably in North Dakota and Iowa, where the minimum tipped wages are $4.86 and $4.35 an hour, respectively.

Two states — Wyoming and Georgia — have minimum wages below the federal minimum, at $5.15 each. Wyoming’s tipped wage minimum is $2.13 an hour, and Georgia hasn’t established one.

Alabama, Louisiana, Tennessee, Mississippi, South Carolina and Tennessee don’t set minimum wages.

Scheduled increases for Dec. 31 and Jan. 1 according to the Economic Policy Institute are:

• Maryland increases to $13.25 on Jan. 1, 2023, with future increases to $14 in 2024 and $15 in 2025. Small businesses with fewer than 15 employees reach $12.80 on Jan. 1, 2023, with future increases to reach $15 in 2026.
• Delaware increases to $11.75 on Jan. 1, 2023, with future increases to $13.25 in 2024 and $15 in 2025.
• Illinois increases to $13 on Jan. 1, 2023, with future increases to $14 in 2024 and $15 in 2025.
• Massachusetts increases to $15 on Jan. 1, 2023.
• Michigan is scheduled to increase to $10.10 on Jan. 1, 2023. Pending litigation could affect 2023 and future increases (see MI Dept. of Labor and Economic Opportunity).
• Missouri increases to $12 on Jan. 1, 2023, and then is indexed for the cost of living.
• Nebraska increases to $10.50 on Jan. 1, 2023, with future increases to $12 in 2024, $13.50 in 2025, and $15 in 2026, and then is indexed.
• New Jersey increases to $14.13 on Jan. 1, 2023 and $15 in 2024, and then is indexed. For businesses with less than six employees, it goes to $12.93 on Jan. 1, 2023 and rises to $15 by 2026, with further increases to reach parity with the regular minimum wage in 2028.
• New Mexico increases to $12 on Jan. 1, 2023.
• New York: Upstate New York increases to $14.20 on Dec. 31, 2022, en route to $15 under current law. New York City, Westchester County and Long Island are already at $15. A campaign is underway to raise the state minimum wage above $15.
• Rhode Island increases to $13 on Jan. 1, 2023, $14 in 2024, and $15 in 2025.

State increases later in 2023:

• Connecticut will raise its minimum wage to $15 on June 1, 2023, with annual indexing beginning Jan. 1, 2024.
• Nevada’s minimum wage is scheduled to increase on July 1, 2023, to $11.25 for employers who do not offer qualifying health insurance and $10.25 for those who do provide health insurance. Under Question 2, passed by voters in November 2022, Nevada’s minimum wage will reach $12 on July 1, 2024, regardless of whether employers provide health benefits.
• Oregon and D.C. have cost of living increases on July 1, 2023.
• Florida’s minimum wage will increase to $12 on Sept. 30, 2023, and then by $1 a year until reaching $15 in 2026; after that Florida will resume annual indexing.