2.4 VIRGINIA WAGE PAYMENT LAWS
2.401 In General. Most states, including Virginia, have laws that regulate the method and manner of paying wages. 202 The following is an
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overview of the Virginia wage payment statute, 203 which addresses, among other things, when an employer may withhold wages from an employee for money that the employer claims is owed by the employee to the company. 204
2.402 Medium of Payment. 205 Employers must pay wages or salaries in cash or by check payable upon demand in lawful United States money. Employers also have the option of paying wages by electronic funds transfer into an employee's account or by credit to a prepaid debit card or card account from which the employee is able to withdraw or transfer funds, as long as the employer fully discloses any applicable fees and the employee consents to the method of payment.
Effective January 1, 2010, employers may pay wages by credit to a prepaid debit card or card account even without the employee's affirmative consent, but only under the following conditions: if the employee fails to designate a financial institution for automated electronic transfer, the employer may make payment in the form of a prepaid debit card, but only if the employer arranges for that card or card account to be issued through a network system of financial institutions in which the employee must have the "ability to make at least one free withdrawal or transfer per pay period, which withdrawal may be for any sum in such card or card account as the employee may elect, using such card or card account at financial institutions participating in such network system." 206 Additionally, the Virginia Department of Labor and Industry (DOLI) maintains that an employer may not require an employee, as a condition of employment, to receive pay through an electronic funds transfer.
2.403 Pay Schedules. Employers must establish regular pay periods and pay salaried employees at least once a month and hourly rate employees at least once every two weeks or twice a month. 207 DOLI further takes the position that "it is a violation of law not to pay all wages due on the established payday." 208
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2.404 General Rule Regarding Wage Withholding. A question often arises, especially when the employer-employee relationship ends, as to whether the employer may offset against an employee's wages for benefits conferred on the employee, such as the provision of uniforms, pay advances, or training. In addition, when an employee is allegedly responsible for causing the employer a loss (such as cash drawer shortages, equipment or inventory breakage, or theft), employers often seek to offset employee wages to compensate for the loss. Whether the employer may offset the employee's wages in these cases is governed by the Virginia wage payment statute. 209
The relevant portion of the statute is as follows:
| A. | 1. . . . Upon termination of employment an employee shall be paid all wages or salaries due him for work performed prior thereto; such payment shall be made on or before the date on which he would have been paid for such work had his employment not been terminated. | |
| C. | No employer shall withhold any part of the wages or salaries of any employee except for payroll, wage or withholding taxes or in accordance with law, without the written and signed authorization of the employee. . . . | |
| D. | No employer shall require any employee, except executive personnel, to sign any contract or agreement which provides for the forfeiture of the employee's wages for time worked as a condition of employment or the continuance therein, except as otherwise provided by law. 210 |
Thus, it is clear from the statute that:
| 1. | An employee must be paid his or her final wages after termination on the same schedule that would have pertained as if the employee had remained employed; | |
| 2. | Any offset against employee wages, whether upon termination or during employment, may not be made without the written and signed authorization of the employee; and | |
| 3. | An employee's wages are not subject to "forfeiture." |
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An employer who violates these proscriptions "willfully and with intent to defraud" is guilty of a misdemeanor. The employer, in addition to paying the employee the amounts unlawfully withheld, may be subject to payment of interest on wages due, civil penalties, and attorney fees. 211
2.405 Application of the Virginia Wage Payment Statute.
A. In General. Little, if any, case law exists applying and interpreting the restrictions set forth in the Virginia wage payment statute. But DOLI and the Virginia Attorney General's Office have, at various times, issued some policy guidance with respect to the application of these rules.
B. Requirement of a "Written and Signed Authorization." In Division Policy Statement 88-21 (now contained in its internal guidance to investigators), 212 DOLI has taken the position that in order for an authorization by an employee for wage deduction to be valid, it must be (i) truly voluntary and (ii) not a condition of employment. Thus, a blanket authorization signed by the employee, such as "I agree that the Company may deduct from my wages for any losses caused by my actions or conduct,"...
