Image courtesy of Virginia DOL
Virginia Department of Labor seal
The Virginia Department of Labor and Industry (DOLI) announced Monday that the Virginia minimum wage rate will increase to $12.77 effective Jan. 1, 2026, in accordance with Virginia law. All Virginia employers must pay covered employees at a rate not less than the minimum wage.
“Virginia’s Minimum Wage Act allows for gradual adjustment of the minimum wage rate in response to economic conditions.” said DOLI Commissioner Gary G. Pan. “The new minimum wage will ensure the Commonwealth remains the leading destination for businesses and job seekers alike.”
Earlier this year, Gov. Youngkin vetoed (for the second straight year) a widely backed bill to raise Virginia’s minimum wage that would have allowed it to climb from $12.41 per hour to $13.50 per hour by January 2026, and reach $15 by January 2027, Virginia Mercury reported.
Under Virginia law, the Commissioner of the Department of Labor and Industry has the duty to establish an adjusted state hourly minimum wage annually. The new minimum wage is calculated by adding the current minimum wage to the product of the current minimum wage and percentage increase of the United States Average Consumer Price Index, as published by the Bureau of Labor Statistics of the U.S. Department of Labor.
"Economic conditions," and more specifically, the Consumer Price Index, drove state labor commissioner Gary G. Pan to hike the rate, Axios Richmond reported.
That's because of the Virginia Minimum Wage Act, which the General Assembly passed in 2020 — raising the state's minimum wage (then $7.25 an hour) for the first time in more than a decade, according to Axios Richmond.
The current minimum wage rate for 2025 is $12.41. According to the U.S. Department of Labor Bureau of Labor Statistics, the 2024 percentage increase in the Consumer Price Index for all items, all urban consumers (CPI-U), is 2.9%. Therefore, the new adjusted state hourly minimum wage is $12.77 ($12.41 + [$12.41 x .029] = $12.77). The Virginia adjusted state hourly minimum wage rate for January 1, 2026 until January 1, 2027 is $12.77. This calculation will continue to be used for annual minimum wage rate adjustments.
The minimum wage applies to most employees in Virginia, including full-time, part-time, and temporary workers. However, certain exemptions exist, such as for some seasonal and job-specific categories. Under the Fair Labor Standards Act, an employer may pay a tipped employee no less than $2.13 per hour, but their total earnings (the combination of wages and tips received) must meet Virginia’s minimum wage rate. For more information about the minimum wage increase and Virginia’s minimum wage laws, visit: www.doli.virginia.gov.
DOLI sent a letter to business groups in Virginia, to provide notification of the increase, and a copy of the letter can be found here.
