Advocates calling for the General Assembly to increase the minimum wage rally outside the Capitol last year. (NBC12)
Continue to exempt nannies? What about waitstaff? A carve-out for employers who offer health insurance? Different wages for different regions?
It’s all on the table as Democrats in Virginia sort out the specifics of their campaign promise to raise the state’s minimum wage to $15 an hour.
Negotiations began in earnest this week as both the House and the Senate began debating legislative proposals. Sharp divisions between the two chambers are already apparent, with the Senate generally advocating a more conservative path to $15 (that would stop at $11.75 for many employees) and the House pursuing legislation that will apply to more workers sooner and continue raising the wage for years.
Five key points of disagreement have emerged:
1. How fast to ramp up wages and whether to peg that final number —$15— to inflation going forward.
The House wants to move quicker than the Senate, with an increase to $10 on July 1 of this year, steadily ramping up over five years to $15 in 2024.
Under the Senate’s proposal, it would increase to $9.75 in July and take six years to get to $15.
Once at $15, the House proposes automatic annual increases pegged to inflation, something House leaders say they view as critical. Del. Lamont Bagby, D-Henrico, who chairs the House subcommittee that heard the legislation, argued indexing the wage would guarantee workers are paid adequately regardless of who is in power and what agreements they can reach. “The people won’t have to suffer because of politics,” he said.
Sen. Majority Leader Dick Saslaw, D-Fairfax, unsuccessfully advocated for the same approach in his chamber. In a committee meeting earlier this week, however, he was outvoted.
“I’m very concerned that just taking this up will have a … huge impact on the economy and I just want to slow this down a little,” said Sen. David Marsden, D-Fairfax, who advanced the alternative approach the Senate ultimately adopted.
2. Whether to let businesses that offer health insurance pay their employees less.
The Senate is also pursuing an exemption that would allow any company that offers its employees a health plan to pay a minimum wage of $11.75.
Marsden said he proposed the idea conscious of the impact a wage increase would have on the budget of the state, whose employees receive insurance.
Saslaw argued that any budgetary (and wider economic impacts) would be offset by increased spending and thus tax revenues generated when people are making more money. Combined with no plan to tie the final rate to inflation, he argued the overall effect will be a de facto $11.75 for most.
“(Insurance) should not be combined into the total,” he said. “You’ll be back here in 10, 12, 15 years from now still trying to raise it above $11.75.”
No similar carve out for benefits has been proposed or discussed in the House.
3. Whether to raise the minimum wage for tipped workers, too.
The Senate’s proposal doesn’t include a minimum wage increase for tipped workers. Current law requires employers to pay them $2.13 an hour unless their total wage with tips falls below the current $7.25 federal minimum, in which case they must make up the difference.
Lawmakers in the Senate noted opposition to changes in pay structure among waitstaff in Maine, where workers campaigned against an increase because they worried it would lead customers to tip less and reduce their take home pay.
In the House, however, delegates argue not all servers are pulling in the kinds of tips that would offset the benefits of a state-ordered increase in base wages.
Their proposals, opposed by the restaurant industry but so far no rank-and-file waitstaff, would raise the tipped base minimum wage $4.88 in year one up to $9.88 by year five.
4. Whether to eliminate exemptions that allow employers to pay farm and domestic workers less.
There are a handful of other industries that are currently exempted from the state’s minimum wage laws, including summer camp employees, caddies and traveling salespeople.
The Senate bill would maintain them. The House wants to eliminate two categories they say unfairly target women and minorities: farm workers and domestic employees.
Of an estimated 60,000 domestic nannies and housekeepers working in the state, 97 percent are women and 53 percent are non-white, according to an analysis by The Commonwealth Institute.
The agriculture industry is particularly opposed to the change, arguing that farms rely on a piece-rate wage structure to incentivize employees. “Having an incentive for hard work really helps us out,” said a representative of the Virginia Farm Bureau.
Del. Jeion Ward, D-Hampton, who filed the House’s version of the legislation, described the exemptions an “unjust loophole” and called on her colleagues to support legislation “rooted in an idea that there is dignity in all work.”
5. How (if at all) to account for regional cost of living differences.
Republicans, who have for years joined business groups in across-the-board opposition to increasing the minimum wage, have largely stayed out of the debate beyond urging their counterparts to reverse course.
But one area GOP lawmakers have pushed to influence the legislation is with pleas that their counterparts at least consider adopting a regional minimum wage, arguing that $11.75 or $15 an hour might work in urban areas the majority of Democratic lawmakers represent, but would devastate rural areas.
“You probably don’t know where Altavista is,” said Sen. Steve Newman, R-Lynchburg. “You don’t understand where Lebanon is. But these areas are struggling for jobs like you would never believe, and you’re imposing a Northern Virginia rate on the rest of the state.”
Democrats in the Senate agreed to attach a clause directing the state’s economic development agency to study the potential impact of a regional minimum wage that could be adopted next year.
Advocacy groups, including the Commonwealth Institute, argue the step is not necessary, citing a study by researchers at the Berkeley University on the effects of an increase to $15 in low-wage areas that found no negative employment effects but did chart “substantial declines in household and child poverty.”
“Nowhere in the commonwealth is the current minimum wage sufficient to reasonably pay the bills of even a childless adult, and a universal $15 wage floor will help lift families across the commonwealth,” said the institute’s research director, Laura Goren.
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