RICHMOND, Va. (AP) — Virginia lawmakers overhauled labor and employment laws this year in a way that advocates say will help low-income workers but the business community warns could hurt the state's overall economy.
The changes came as a new Democratic majority took control of both the Senate and House of Delegates for the first time in more than two decades.
“For too long Virginia has touted our status as a top state to do business while neglecting the rights and opportunities of those working in the Commonwealth," House Appropriations Chair Luke Torian said in a statement Monday, a day after lawmakers wrapped up most of their work.
Proponents of a bill that will increase the minimum wage from the current $7.25 to $9.50 an hour in January say it will have the most direct impact on struggling workers. Under the compromise measure approved during the final days of the session, the minimum wage would gradually increase to $12 by 2023, but raising it higher than that would require another vote by the General Assembly.
Democratic lawmakers said Virginia has lagged behind other states in helping low-income workers who haven’t benefited from the state’s business-friendly reputation. But Republicans said the measure was increasing the minimum wage too fast and without proper attention to what impact it would have on the state’s poorer areas.
“Business doesn’t have a magic pot of money,” Republican Del. Chris Head, who along with his wife owns a company that provides in-home care to seniors, said in a floor speech against the bill.
The bill does not implement wage increases regionally, though it does direct a feasibility study of such a system. Some Republicans pushed for a regional wage, arguing that the poorer parts of the state shouldn’t face the same mandate as wealthier northern Virginia.
The legislation also exempts farm workers.
“I feel like they came out with a very good compromise bill. It's not everything everyone would want, but this is a significant improvement for many, many workers in Virginia," said Kim Bobo, executive director of the Interfaith Center for Public Policy.
The Virginia Chamber of Commerce still has significant concerns on the overall impact to Virginia's “most vulnerable businesses,” said Barry DuVal, the group's president and CEO.
Another top priority for workers' advocates — requiring employers to provide paid sick days — died on the last day of the session after intense opposition from business groups.
Supporters said it would protect public health by allowing workers to stay home when they or their children are sick.
“So here they are, trying to provide for their families, trying to pay their rent and yet they know they need to go to the doctor and they cannot take time off,” said Sen. Barbara Favola, the bill’s sponsor.
Under the measure, businesses with 15 or more employees would have been required to provide up to five paid sick days per year. Smaller employers would have been required to provide up to two unpaid sick days per year.
Nicole Riley, the Virginia director of the National Federation of Independent Business, said the legislative session was a “mixed bag” for businesses.
She said blocking repeal of the state’s right to work laws and the paid sick days proposals were wins for business owners. But she said passage of a higher minimum wage and several other bills that make it easier for workers to sue their employers for alleged unpaid wages, discrimination and other issues is going to hurt companies’ bottom lines.
"Hiring and firing employees has probably become a lot more cumbersome,” she said.
The legislature also approved bills aimed at protecting consumers against predatory lenders, which advocates say will help the low-income workers who are most often forced to turn to them instead of other types of credit.
One bill that would take effect in 2021 will cap interest at an annual rate of 36 percent, plus maintenance fees. It will also set a minimum loan duration of four months and a maximum of 24 months so people have more time to pay them back. In 2018, the average annual percentage rate charged by Virginia payday lenders was 251 percent, according to a report from the State Corporation Commission's Bureau of Financial Institutions.
The bill also will cap interest at an annual rate of 36 percent for motor vehicle title loans. The average annual percentage rate charged on those loans was 217 percent in 2018, according to the same report.
Jay Speer, executive director of the Virginia Poverty Law Center, said the legislation establishes a more equitable loan system.
"It's fair to both parties, not just to the parties that have the economic power,” he said.
Associated Press writer Alan Suderman contributed to this report.