In this article:
Budget Update
Accelerated Sales Tax (AST) | Unemployment Insurance Fund | Rebuild Virginia | Polystyrene Ban | Grocery Tax
Legislation Updates:
Minimum Wage | Nonpayment of Wages | Paid Leave | Overtime
Budget
Both the House and the Senate released committee-approved amendments to the introduced budgets over the weekend. Any differences between the two will have to be worked out in Conference Committee over the coming weeks.
Below is a summary of a few of the key budget-related issues to the retail industry. You can find the full list of both Senate and House Committee Approved Amendments to the introduced Budget here.
Accelerated Sales Tax (AST)
The House budget includes an amendment that eliminates AST in the fiscal year 2022. The Senate budget did not include this amendment, so it still eliminates AST in the fiscal year 2023. (Item 3-5.06 #1h)
Unemployment Insurance Fund
The House budget includes an amendment that deposits $180.0 million of remaining federal American Rescue Plan Act funds into the Unemployment Insurance (UI) Trust Fund in order to eliminate the fund builder UI tax for all employers in tax year 2023. (Item 479.20 #2h)
The House also included an amendment that instructs the VEC to exclude the Unemployment Insurance fund builder tax from an Employer’s 2023 UI Tax rate. (Item 370 #1h)
The Senate included an amendment that ensures that the Unemployment Trust Fund’s fund building rate shall be set for Calendar Year 2023 at a rate not to exceed the rate in effect for Calendar Year 2020. (Item 370 #7s)
Rebuild Virginia
There is an amendment in the House budget to use ARPA funds to make a deposit into Rebuild Virginia which is anticipated to fund all remaining eligible applications that were submitted prior to November of 2020. However this was not found in the Senate budget, so it will need to be worked out in conference if this remains in the final budget adopted by both Bodies. (Item 479.20 #1h)
Polystyrene Ban
Both the House and the Senate included amendments to delay the prohibition on the use of polystyrene containers by 5 years, until July 1, 2030. (Item 377 #1h and Item 377#1s)
Grocery Tax
Both the House and the Senate introduced amendments on this issue. The House amendment completely eliminates the grocery tax (Item 4-14 #3h), and the Senate amendment eliminates only the State portion (1.5%) of the grocery tax (Item 4-14 #1s).
Legislation:
Minimum Wage
HB 296 - McNamara - Minimum wage; removes certain provisions relating to increasing state wage. Passed by indefinitely (defeated) by Senate Commerce and Labor Committee (11-Y 4-N)
- Repeals certain provisions of the Code of Virginia related to increasing the state minimum wage to more than $11.00 per hour. The bill also repeals provisions related to increasing the state minimum wage based on an annual adjusted minimum wage determined by the Department of Labor and Industry.
HB 320 - Freitas - Minimum wage; removes certain provisions relating to increasing state wage. Passed by indefinitely (defeated) by Senate Commerce and Labor Committee (12-Y 3-N)
- Repeals certain provisions of the Code of Virginia related to increasing the state minimum wage to more than $11.00 per hour. The bill also repeals provisions related to increasing the state minimum wage based on an annual adjusted minimum wage determined by the Department of Labor and Industry.
HB 1040 - Scott, P.A. - Minimum wage; small employers. Passed by indefinitely (defeated) by Senate Commerce and Labor Committee (12-Y 3-N)
- Exempts employers that are individuals or entities with 10 or fewer employees from the state minimum wage requirements.
Nonpayment of Wages
HB 889 - Kilgore - Nonpayment of wages; defense of contractor. Passed out of Senate Commerce and Labor Committee with Substitute (14-Y 1-N)
- Provides that a contractor, regardless of tier, has a valid defense to a claim for nonpayment of wages if he obtains a written certification from the subcontractor stating that (i) the subcontractor and each of his sub-subcontractors has paid all employees all wages due for the period during which the wages are claimed for the work performed on the project and (ii) to the subcontractor's knowledge, all sub-subcontractors below the subcontractor, regardless of tier, have similarly paid their employees all such wages.
SB 538 - Peake - Nonpayment of wages; defense of contractor. Passed out of House Commerce and Energy Committee with Substitute (14-Y 8-N)
- Provides that a contractor, regardless of tier, has a valid defense to a claim for nonpayment of wages if he obtains a written certification from the subcontractor stating that (i) the subcontractor and each of his sub-subcontractors has paid all employees all wages due for the period during which the wages are claimed for the work performed on the project and (ii) to the subcontractor's knowledge, all sub-subcontractors below the subcontractor, regardless of tier, have similarly paid their employees all such wages.
Paid Leave
HB 1156 - Byron - Private family leave insurance. Passed out of Senate Commerce and Labor Committee (15-Y 10-N)
- Establishes family leave insurance as a class of insurance. The bill defines " family leave insurance" as an insurance policy issued to an employer related to a benefit program provided to an employee to pay for the employee's income loss due to (i) the birth of a child or adoption of a child by the employee; (ii) placement of a child with the employee for foster care; (iii) care of a family member of the employee who has a serious health condition; or (iv) circumstances arising out of the fact that the employee's family member who is a service member is on active duty or has been notified of an impending call or order to active duty. Under the bill, family leave coverage may be written as an amendment to a group disability income policy, included in a group disability income policy, or written as a separate group policy purchased by an employer. The bill prohibits delivery or issue for delivery of a family leave insurance policy unless a copy of the form and the rate manual showing rates, rules, and classification of risks have been filed with the State Corporation Commission. The bill prohibits an individual certificate and enrollment form from being used in connection with a group family leave insurance policy unless the form for the certificate and enrollment form have been filed with the Commission. The bill provides that "life and annuities insurance agent" means an agent licensed in the Commonwealth to sell, solicit, or negotiate, among other types of insurance, family leave insurance, on behalf of insurers licensed in the Commonwealth.
SB 15 - Favola - Insurance; paid family leave. Passed out of House Commerce and Energy Committee (22-Y 0-N)
- Establishes paid family leave as a class of insurance. The bill defines "paid family leave insurance" as an insurance policy issued to an employer related to a benefit program provided to an employee to pay for the employee's income loss due to (i) the birth of a child or adoption of a child by the employee; (ii) placement of a child with the employee for foster care; (iii) care of a family member of the employee who has a serious health condition; or (iv) circumstances arising out of the fact that the employee's family member is on covered active duty or has been notified of an impending call or order to covered active duty in the Armed Forces of the United States. Under the bill, paid family leave coverage may be written as an amendment to a group disability income policy, included in a group disability income policy, or written as a separate group policy purchased by an employer.
Overtime
HB 1173 - Ware - Fair Labor Standards Act; overtime, employer liability. Reported from Senate Commerce and Labor Committee with a Substitute and Referred to Senate Finance (13-Y 1-N 1-A)
- Replaces the current provisions of the Virginia Overtime Wage Act with the provision that any employer that violates the overtime wage requirements of the federal Fair Labor Standards Act, and any related laws and regulations, shall be liable to its employee for remedies or other relief available under the Fair Labor Standards Act.
