Here’s a look at two bills that are important to Virginia’s small business community:
Minimum Wage
Both the House and the Senate have passed their own version of a minimum wage increase.
In the House (HB 395), the minimum wage would increase to $10 an hour beginning this July 1, 2020, steadily increasing to $15/hour by July 1, 2025, and then would be adjusted each year based on inflation. HB 395 also eliminates current exemptions for any person employed as a farm laborer or farm employee or any person employed in domestic service or in or about a private home.
The Senate proposal (SB 7) includes a regional approach and a few amendments to address some of the concerns raised by NFIB and other business organizations. Currently, SB 7 would increase the minimum wage to $9.50 an hour by January 1, 2021, and remain at that rate for 1.5 years until it’s increased to $10.50 an hour on July 1, 2022.
The following year it will increase to $11.50 an hour at which point in 2024 “regional wages” will come into effect for any additional increases to the minimum wage. “Regional wages” will be determined to compare a region’s cost of living to the highest income wage region. For example, if the highest wage region has a $100,000 median household income, the minimum wage would increase by $1 an hour and then if another region’s median household income is $40,000, their increase would be 40 cents an hour.
Also, the Senate includes several exemptions. For students aged 22 or less who work less than 20 hours a week and new employees who are in training for the first 90 days of their employment would be paid 75% of the minimum wage. And the Senate restored the farm and domestic labor exemptions the House removed.
In the Senate committee this past Monday, Chairman Senator Saslaw told House leaders that their minimum wage bill had no chance of passing the Senate as drafted, setting the stage for conference negotiations between lawmakers in the two chambers over the next week. While it is clear Governor Northam and Democrat leaders have made raising the minimum wage their highest business priority, NFIB will continue to voice opposition and express the concerns many of you have shared with us.
Paid Leave
NFIB was successful in delaying for at least a year several bills establishing a new state family medical leave insurance program which would institute a payroll tax to be paid by both employee and employer in order to cover up to 12 weeks of paid leave for employees that qualify.
There is language in the budget directing the Governor to convene a workgroup of stakeholders to study the issue, analyze the fiscal impact on the state and businesses and compare the programs in other states over the next year and offer recommendations.
However, another proposal (SB 481) to require private employers with 15 or more employees to provide earned paid sick time for those employees is still alive. Employees would earn at least one hour of paid sick leave for every 30 hours worked and would be able to use as much as 40 hours (5 days) of earned paid sick time in a year. There are many additional burdens on employers throughout this legislation including notice requirements, record keeping requirements, and much more.
