The Virginia General Assembly approved legislation that would incrementally increase the minimum wage to $12 per hour by 2023 if Gov. Ralph Northam signs the bill, which is expected.
The minimum wage would go up from the current $7.25 per hour to $9.50 in 2021, $11 in 2022 and $12 in 2023. The bill was approved nearly along party lines, with support from Democrats and opposition from Republicans.
This version of the minimum wage bill came out of a joint conference committee with House and Senate Democrats who disagreed on how the minimum wage increase should affect lower-income regions of the commonwealth. The compromise bill essentially tables this debate until 2022.
The initial House version, House Bill 395, sought to increase the minimum wage to $15 per hour across the entire state, while the initial Senate version, Senate Bill 7, sought a regional approach, which would have increased the minimum wage to $15 per hour only in the wealthiest parts of the states. Lower-income regions would have had their increases tied to the average regional salary.
As a compromise, the new bill would compel three government agencies to conduct a joint review to understand the effect of a regional minimum wage increase. The agencies would consider several factors, which include its impact on the cost of living, its impact on workers and its impact on income inequality. They also would consider the economic benefits of a regional minimum wage and whether it is feasible.
The compromise bill contains a provision designed to pave the way for increasing the minimum wage to $13.50 by 2025 and $15 per hour by 2026, but first requires legislative action. Lawmakers will have the opportunity to approve these two increases by July 1, 2024. If they do not approve the increases by 2024, then the $12 minimum wage would just be tied to inflation.
