Virginia Wage-Theft Overhaul: HB 238 Adds Liquidated and Treble Damages Starting July 1, 2026
Independently fact-checked against primary sources (last audited June 25, 2026). · Law checked current as of August 9, 2026. · 5 primary sources cited on this page. How we verify our legal content
Virginia HB 238, signed in the 2026 Regular Session, rewrites the Commonwealth's wage-payment, overtime, minimum-wage, and worker-misclassification statutes into one penalty scheme. Starting July 1, 2026, a violation of Va. Code 40.1-29 can cost an employer unpaid wages plus an equal amount in liquidated damages, with triple damages for knowing violations.
Information last verified on June 25, 2026. This is a developing story; we update it as the record changes.
Status: Signed in 2026; takes effect July 1, 2026. As of June 25, 2026 the new penalty scheme is not yet in force.
Jurisdiction scope: This change applies to Virginia wage-and-hour law only. It does not alter federal Fair Labor Standards Act rules or the law of other states. For the baseline framework, see our guide to Virginia at-will employment and worker protections.
What Happened
The Virginia General Assembly passed HB 238 during its 2026 Regular Session, and the governor signed it. As reported, Gov. Abigail Spanberger approved the bill, which carries a July 1, 2026 effective date along with the session's other approved measures. The chief patron was Del. Alfonso Lopez.
HB 238 is an omnibus rewrite. Instead of leaving each wage statute with its own remedy, the bill ties Virginia's minimum-wage, overtime, wage-payment, prevailing-wage, and worker-misclassification provisions to a single damages structure. Multiple employment-law analyses describe the result as a uniform penalty for different wage-and-hour violations.
The bill amends Va. Code 40.1-29, Virginia's core wage-payment statute, and related provisions in Title 40.1. Reported and corroborated targets include the overtime statute at Va. Code 40.1-29.2 and the worker-misclassification statute at Va. Code 40.1-28.7:7. Confirm the full list of amended sections against the enrolled text.
What the Law Actually Says
The damages structure is the center of HB 238. Under the standardized scheme, an employer that violates a covered wage law is liable for all unpaid wages, an equal amount as liquidated damages, 8% annual interest on the amount owed, and reasonable attorney's fees. The live text of Va. Code 40.1-29.2 already routes overtime remedies through the relief available under subsection J of Va. Code 40.1-29, and HB 238 aligns the other wage statutes to that same remedy.
For knowing violations, the penalty rises. If a court determines that the employer knowingly violated the law, the affected worker is entitled to treble damages, an amount equal to triple the wages owed, plus reasonable attorney's fees.
The limitations period is three years. As reported, claims for minimum-wage, overtime, and misclassification violations carry a three-year statute of limitations and may be pursued through collective actions. The live overtime statute, Va. Code 40.1-29.2, already states that an action must be commenced within three years after the cause of action accrues.
HB 238 broadens two key definitions. The definition of "employer" is expanded across the affected statutes to include any person acting directly or indirectly in the interest of an employer, aligning the term across the minimum-wage, wage-payment, overtime, and misclassification laws. The definition of "wages" is expanded to cover hourly wages, prevailing wages, piece-rate wages, day rates, salaries, overtime wages, commissions, tips, bonuses, and damages due to misclassification.
General-contractor exposure grows. As reported, the bill expands the circumstances under which a general contractor can be held liable for a subcontractor's wage violations and narrows the "knew or should have known" defense for construction contracts entered on or after July 1, 2026. Check the enrolled text for the exact contractor-liability language.
The Commissioner gains self-initiation authority. As reported, the Commissioner of Labor and Industry can initiate enforcement without first receiving a written complaint from a worker, and can seek restitution, damages, and statutory penalties administratively or by referral to the Attorney General.
The bill also touches recordkeeping. As reported, employers must retain pay records for at least three years after the underlying work is performed, matching the new limitations period.
This Virginia overhaul lands alongside other 2026 Commonwealth employment-law changes, including the Virginia SB 170 noncompete restrictions. Readers tracking wage-and-hour developments at the federal level can compare the vacated 2024 DOL overtime salary-threshold rule and the struck-down FTC noncompete ban in Ryan v. FTC.
Analysis: Why This Matters
The following is analysis from the Recording Law Editorial Team.
The practical effect of HB 238 is to raise the cost of a wage violation and lower the friction of pursuing one. Before this change, the remedy a Virginia worker could recover depended on which statute had been violated, which created uneven exposure across minimum-wage, overtime, and misclassification claims. Collapsing those into one remedy with automatic liquidated damages removes that inconsistency.
The treble-damages trigger for knowing violations gives the scheme teeth. Doubling damages by default and tripling them for knowing conduct, with attorney's fees on top, changes the math for both sides of a wage dispute. The three-year window and the expanded definitions of employer and wages widen who can be reached and how far back a claim can stretch.
The general-contractor and Commissioner provisions extend enforcement beyond the direct employer relationship. Pushing liability up the contracting chain and letting the agency move without a worker complaint shifts some of the burden of compliance from individual workers onto businesses and the state. The exact reach of those provisions depends on the enrolled language, which is why the section-level details should be read against the final text rather than summaries.
How This Affects You
If you work in Virginia, the law expands the remedies available when an employer fails to pay what you are owed under state wage law. After July 1, 2026, a successful claim under the standardized scheme can include the unpaid wages, an equal amount in liquidated damages, 8% interest, and attorney's fees, with triple damages possible if the violation was knowing. The broader definition of "wages" means tips, commissions, bonuses, and misclassification damages can be part of a claim.
Workers who believe they have not been paid correctly can generally file a complaint with the Virginia Department of Labor and Industry, which administers the Commonwealth's wage laws, or pursue a civil action. Under HB 238, as reported, the Commissioner can also initiate enforcement without waiting for a complaint.
If you run or manage a Virginia business, the change raises potential exposure for pay practices, worker classification, and, for construction, your subcontractors' wage compliance. Reviewing pay records, classification decisions, and recordkeeping against the new three-year period is the kind of step employers commonly take before an effective date. This article is general information, not legal advice for any specific situation.
What Happens Next
HB 238 takes effect July 1, 2026. Until then, the prior remedies remain in place, and as of June 25, 2026 the standardized penalty scheme is not yet in force. The enrolled text on Virginia LIS controls the precise section numbers, definitions, and contractor-liability language; where this article hedges a section number "as reported," confirm it there. We will update this page as the record develops, including any guidance from the Virginia Department of Labor and Industry.
Disclaimer: This article is general legal information, not legal advice. It does not create an attorney-client relationship. Wage-and-hour rules are detailed and fact-specific, and section numbers in pending or newly enacted legislation can shift between versions. For advice about your situation, consult a licensed Virginia attorney, and confirm the enrolled text of HB 238 on Virginia LIS.
Sources
- Virginia LIS, HB 238 (2026 Regular Session) bill details: https://lis.virginia.gov/bill-details/20261/HB238
- Code of Virginia 40.1-29 (payment of wages): https://law.lis.virginia.gov/vacode/title40.1/chapter3/section40.1-29/
- Code of Virginia 40.1-29.2 (employer liability; overtime): https://law.lis.virginia.gov/vacode/title40.1/chapter3/section40.1-29.2/
- Code of Virginia 40.1-28.7:7 (misclassification of workers): https://law.lis.virginia.gov/vacode/title40.1/chapter3/section40.1-28.7:7/
- Virginia Department of Labor and Industry, Virginia Labor Laws: https://doli.virginia.gov/programs/labor-law/virginia-labor-laws/
- Bloomberg Tax, "Virginia Makes Uniform Penalty for Different Wage-Hour Violations": https://news.bloombergtax.com/payroll/virginia-makes-uniform-penalty-for-different-wage-hour-violations
- Littler, "Virginia's Democratic Trifecta Enacts a Flurry of New Wage and Hour Laws": https://www.littler.com/news-analysis/asap/virginias-democratic-trifecta-enacts-flurry-new-wage-and-hour-laws-during
- Jackson Lewis, "Virginia General Contractors to Face Expanded Responsibility for Unpaid Wages": https://www.jacksonlewis.com/insights/virginia-general-contractors-face-expanded-responsibility-unpaid-wages
Related articles
- Virginia at-will employment and worker protections
- Virginia SB 170 noncompete law
- 2024 DOL overtime rule vacated; salary threshold restored
- FTC noncompete ban struck down in Ryan v. FTC
Last updated: 2026-06-25. This is a developing story; details verified as of 2026-06-25.
Frequently Asked Questions
What is Virginia HB 238?
HB 238 is an omnibus wage-and-hour bill from Virginia's 2026 Regular Session that standardizes the penalties for minimum-wage, overtime, wage-payment, prevailing-wage, and worker-misclassification violations under Va. Code 40.1-29 and related Title 40.1 statutes. It takes effect July 1, 2026.
When does HB 238 take effect?
July 1, 2026, the standard effective date for Virginia bills approved during the 2026 session. As of June 25, 2026 the new penalty scheme is not yet in force.
What damages can a worker recover under the new scheme?
A violating employer is liable for all unpaid wages, an equal amount as liquidated damages, 8% annual interest, and reasonable attorney's fees. If a court finds the employer knowingly violated the law, the worker can recover treble (triple) the wages owed plus attorney's fees.
What is the statute of limitations for these claims?
As reported, the limitations period for the covered wage claims is three years. The live text of Va. Code 40.1-29.2 already states that an overtime action must be commenced within three years after the cause of action accrues.
Which Virginia Code sections does HB 238 amend?
It amends the wage-payment statute Va. Code 40.1-29 and related Title 40.1 provisions. Reported and corroborated targets include the overtime statute Va. Code 40.1-29.2 and the misclassification statute Va. Code 40.1-28.7:7. Confirm the full list against the enrolled text on Virginia LIS.
Are general contractors liable for a subcontractor's wage violations?
As reported, HB 238 expands when a general contractor can be held liable for a subcontractor's wage violations and narrows the knew-or-should-have-known defense for construction contracts entered on or after July 1, 2026. Check the enrolled text for the exact language.
Can the state enforce wage laws without a worker complaint?
As reported, HB 238 lets the Commissioner of Labor and Industry initiate enforcement without first receiving a written complaint and seek restitution, damages, and penalties administratively or by referral to the Attorney General.
How do I file a wage claim in Virginia?
Workers can generally file a complaint with the Virginia Department of Labor and Industry, which administers the Commonwealth's wage laws, or pursue a civil action. This is general information and not advice for any specific case.
Does HB 238 change federal wage law?
No. HB 238 changes Virginia state wage-and-hour law only. It does not alter the federal Fair Labor Standards Act or the law of other states.
Updates
Governing law re-checked for recent changes
Independently fact-checked against the cited primary sources
The Law Behind This Article
This article rests on the statutory provisions below, held in our own legal record and retrieved from the official source. Tap a section to read the operative text.
Code of Virginia, Title 40.1: Labor and Employment
§ 40.1-28.7:7Misclassification of workersIn force
A. As used in this section: "Employer" has the same meaning as provided in 29 U.S.C. § 203. "Internal Revenue Service guidelines" means the most recent version of the guidelines published by the Internal Revenue Service for evaluating independent contractor status, including its interpretation of common law doctrine on independent contractors, and any regulations that the Internal Revenue Service may promulgate regarding determining whether an employee is an independent contractor, including 26 C.F.R. § 31.3121(d)-1. B. An individual who has not been properly classified as an employee may bring a civil action for damages against his employer for failing to properly classify the employee if the employer had knowledge of the individual's misclassification. An individual's representative may bring the action on behalf of the individual. If the court finds that the employer has not properly classified the individual, such employer shall be liable to the aggrieved individual for the applicable remedies, damages, or other relief available in an action brought pursuant to subsection K of § 40.1-29.
Official text (excerpt) · last checked 2026-07-29 · Read the full text in our law library · Verify at law.lis.virginia.gov
Cited in 4 court opinions in our collectionLatest citing opinion in our collection: 2025
Opinions citing this section in our collection:
- Soliz v. James G. Davis Construction Corporation (District Court, E.D. Virginia 2025)“…1 Plaintiffs also alleged that Defendants violated Code of Virginia section 40.1-28.7:7(A). Two weeks after the Amended Co…”
- Torres v. Manganaro Midatlantic, LLC (District Court, E.D. Virginia 2025)“…e violations of the Virginia Misclassification Law (“VML”), Va. Code Ann. § 40.1-28.7:7. Specifically, Plaintiffs allege that…”
- Morton v. DeJoy (District Court, E.D. Virginia 2024)“…That provision speaks of “Misclassification of workers.” Va. Code Ann. § 40.1-28.7:7. But Mr. Morton did not mention § 40.…”
Identified automatically from the court opinions citing this section — not a ranking of which case controls.
§ 40.1-29Time and medium of payment; withholding wages; written statement of earnings; agreement for forfeiture of wages; proceedings to enforce compliance; penaltiesIn forcecited in 5 of our articles
A. As used in this section: "Employer" has the same meaning as provided in 29 U.S.C. § 203. "Wages" includes any remuneration an employer owes to an employee, including hourly wages, minimum wages, piece rate wages, day rates, salaries, overtime wages, legally required prevailing wages, commissions, tips, bonuses, and damages available due to the misclassification of an employee in violation of § 40.1-28.7:7. B. All employers operating a business or engaging an individual to perform domestic service shall establish regular pay periods and rates of pay for employees except executive personnel.
Official text (excerpt) · last checked 2026-09-03 · Read the full text in our law library · Verify at law.lis.virginia.gov
Cited in 49 court opinions in our collectionLatest citing opinion in our collection: 2026
In the courts (editorial summary, independently checked):Pallone v. Marshall Legacy Institute (2000) read Va. Code 40.1-29 as then written to give only an administrative remedy and no implied private action. Federal courts split on whether it supports a Bowman discharge claim: Miller v. Washington Workplace, Inc. (2004) allowed one; Vasquez v. Whole Foods Mkt., Inc. (2018) rejected one.
Opinions citing this section in our collection:
- Coley v. Historic Hotels, Inc. (Virginia Circuit Court 2000, 60 Va. Cir. 466)“…hat his termination was wrongful in that it is violative of Va. Code § 40.1-29, which provides in its pertinent part:…”
- Pallone v. Marshall Legacy Institute (District Court, E.D. Virginia 2000, 97 F. Supp. 2d 742)“…and (iv) violation of the Virginia Wage Payment Act, Va.Code § 40.1-29. Defendant’s threshold dismissal motion…”
- Massachusetts v. Morash (Supreme Court of the United States 1989, 490 U.S. 107)“…34-28-14 (1988); Vt. Stat. Ann., Tit. 21, §§341-345 (1987); Va. Code §40.1-29 (1986); Wash. Rev. Code §§49.48.010 ,…”
Identified automatically from the court opinions citing this section — not a ranking of which case controls.
Also relied on in: Final Paycheck Laws by State: Deadlines, Penalties, and PTO Payout Rules, PTO Payout Laws: Does Your State Require It When You Leave a Job?, Virginia Final Paycheck Laws: No Acceleration, and HB 238's New Cure Deadline
§ 40.1-29.2Employer liabilityIn force
Any employer that violates the overtime pay requirements of the federal Fair Labor Standards Act of 1938, 29 U.S.C. § 201 et seq., as amended, and any regulations, guidance, or rules adopted pursuant to the overtime pay provisions of such federal act or any related governing case law shall be liable to the employee for the applicable remedies, damages, or other relief available in an action brought pursuant to subsection K of § 40.1-29. For the purposes of this section, "employer" and "employee" shall have the meanings ascribed to them under the federal Fair Labor Standards Act and all applicable exemptions, overtime calculation methods, methods of overtime payment, or other overtime provisions within the federal Fair Labor Standards Act and any attendant regulations, guidance, or rules shall apply. Any action brought pursuant to this section shall accrue according to the applicable limitations set forth in the federal Fair Labor Standards Act and shall be commenced within three years after accrual. 2021, Sp. Sess. I, c. 445; 2022, cc. 461, 462; 2026, c. 1040.
Official text (excerpt) · last checked 2026-07-29 · Read the full text in our law library · Verify at law.lis.virginia.gov
Cited in 21 court opinions in our collectionLatest citing opinion in our collection: 2026
Opinions citing this section in our collection:
- Thomas Overby, Jr. v. Anheuser-Busch, LLC (Court of Appeals for the Fourth Circuit 2026)“…ch. 445, 2021 Va. Acts 1st Spec. Sess. 1290, with Va. Code § 40.1-29.2, and 29 U.S.C. § 201 et seq. T…”
- Hatcher v. Hines (District Court, E.D. Virginia 2025)“…WA contains nearly identical definitions as the FLSA. See Va. Code § 40.1-29.2 (2021) (defining “employee” as “any ind…”
- Mullin v. Capital One Services, LLC (District Court, E.D. Virginia 2025)“…201, et seq., (“FLSA”) and the Virginia Overtime Wage Act, Va. Code § 40.1-29.2 “VOWA”). (ECF No. 20 { 1.) Plain…”
Identified automatically from the court opinions citing this section — not a ranking of which case controls.
Sources and References
- Virginia LIS, HB 238 (2026 Regular Session) bill details(lis.virginia.gov).gov
- Code of Virginia 40.1-29 (payment of wages)(law.lis.virginia.gov).gov
- Code of Virginia 40.1-29.2 (employer liability; overtime)(law.lis.virginia.gov).gov
- Code of Virginia 40.1-28.7:7 (misclassification of workers)(law.lis.virginia.gov).gov
- Virginia Department of Labor and Industry, Virginia Labor Laws(doli.virginia.gov).gov
- Bloomberg Tax, Virginia Makes Uniform Penalty for Different Wage-Hour Violations(news.bloombergtax.com)
- Littler, Virginia's Democratic Trifecta Enacts a Flurry of New Wage and Hour Laws(littler.com)
- Jackson Lewis, Virginia General Contractors to Face Expanded Responsibility for Unpaid Wages(jacksonlewis.com)