The upcoming minimum wage increase in Hampton Roads, Virginia, is causing mixed reactions among business owners and workers. Effective May 1, the minimum hourly wage will rise to $9.50 for most non-farm jobs. However, the scheduled raise to $11 on Jan. 1, 2022, is causing concern among businesses, especially in the restaurant, lodging and travel sectors. Del. Jeion Ward, the bill’s chief sponsor, expects the raise to benefit nearly 200,000 Virginians. Meanwhile, various solutions are being explored to address the possible financial strain on businesses, such as alternative wage structures for tipped workers. Despite financial challenges due to the pandemic, some smaller employers are taking the lead in raising wages.
Virginia’s Minimum Wage Increase
On May 1, Virginia’s minimum hourly wage will rise to $9.50 for most non-farm jobs, and for many business owners, that won’t be too disruptive.
Concerns About Future Wage Hikes
But the state’s upcoming Jan. 1, 2022, mandated raise to $11 “is of greater concern” to businesses, says Eric Terry, president of the Virginia Restaurant, Lodging and Travel Association.
Legislative Efforts and Impact on Small Businesses
Terry’s organization successfully lobbied the General Assembly last year to delay the Jan. 1, 2021, implementation of the $9.50 minimum wage.
Impact on Workers
Del. Jeion Ward, D-Hampton, the bill’s chief sponsor, expects nearly 200,000 Virginians to benefit from the raise to $9.50.
Challenges for Businesses
On the national level, recent attempts to raise the minimum wage to $15 have stalled, with both chambers rejecting attempts to include such a hike in the $1.9 trillion American Rescue Plan passed in March.
Financial Strain on Workers
Consuelo Grandados, a 43-year-old El Salvadoran immigrant, works at George Mason University as a contracted janitor.
The Tip Quandary
Another wrinkle for restaurants: Servers’ wages are based partly on tips and a base salary of $2.13 per hour.
A New Model for Wage Structure
Unlike many restaurant owners who say their profit margins will not be able to withstand a sharp increase in wages without tip credits, restaurateur Kevin Healy says he’s figured out an alternative solution.
At the Grassroots Level
In spite of pandemic-related financial concerns and narrower profit margins, smaller employers also are raising wages and, in some cases, are taking the lead.
Question & Answer
What is the upcoming minimum wage increase in Hampton Roads, Virginia?
Effective May 1, the minimum hourly wage will rise to $9.50 for most non-farm jobs.
What is causing concern among businesses in Virginia?
The scheduled raise to $11 on Jan. 1, 2022, is causing concern among businesses, especially in the restaurant, lodging, and travel sectors.
How many Virginians are expected to benefit from the minimum wage raise to $9.50?
Del. Jeion Ward, the bill’s chief sponsor, expects nearly 200,000 Virginians to benefit from the raise to $9.50.
What are some solutions being explored to address financial strain on businesses due to the minimum wage increase?
Various solutions are being explored, such as alternative wage structures for tipped workers.
