Richmond —

Virginia’s minimum wage is $12.77. On January 1 it becomes $13.75. Twelve months after that, $15.00, and from January 2029 it moves with the consumer price index and never goes down.

That is HB 1 and SB 1, Chapters 350 and 351 of the 2026 Acts of Assembly, written into § 40.1-28.10.

The number people quote is 98 cents. Here is what 98 cents actually costs.

The arithmetic

One full-time employee at 2,080 hours a year: $2,038.40.

Minimum-wage staff	January 1, 2027	And again January 1, 2028
10 full-time	$20,384	$26,000
20 full-time	$40,768	$52,000
40 full-time	$81,536	$104,000
75 full-time	$152,880	$195,000

Those are base wages only. Add roughly 7.65% for the employer share of FICA, plus unemployment insurance and any workers’ compensation premium that rides on payroll. On the 40-person line, FICA alone adds about $6,200, so the real number is closer to $87,700 in year one.

And then it happens again. From $13.75 to $15.00 is $1.25, a larger step than the one arriving in January. An operator budgeting only for 2027 is budgeting for the smaller half.

The tipped math moves even though the tipped wage does not

The tipped cash wage stays at the federal $2.13. It is not indexed and it is not going up.

What changes is the size of the credit you are claiming:

	Cash wage	Minimum	Maximum tip credit
Now	$2.13	$12.77	$10.64
January 1, 2027	$2.13	$13.75	$11.62
January 1, 2028	$2.13	$15.00	$12.87

That looks like good news and it is not, quite. A larger credit means a larger gap you are on the hook to close whenever tips fall short. The make-up obligation is per pay period, and a slow February on a $12.87 credit costs more than a slow February on a $10.64 credit.

Two things follow. Your tip-credit notice has to be accurate, and the numbers on it change on January 1. And your overtime premium for tipped staff is calculated on the full minimum wage, not the $2.13 — the single most common wage finding in published Virginia restaurant cases.

Overtime is where the multiplier bites

Overtime is 1.5 times the regular rate, so every step in the floor is magnified by half again on every hour past 40.

At $13.75 the overtime rate is $20.63, against $19.16 today. On a kitchen running 10 overtime hours a week across four cooks, that is roughly $3,000 a year in additional premium on top of the base increase, on four people.

If you are salarying kitchen staff to avoid this, read the enforcement record first. The published Virginia restaurant wage cases are almost entirely back-of-house overtime, not tips: Chicanos Cocina Bar and Grill in Richmond paid $172,392 for 21 workers, and Food for Thought in Williamsburg paid $205,180 plus $50,034 in penalties for 62 workers, both for straight-timing kitchen staff.

Since July 1, tips are inside the statutory definition of wages under § 40.1-29, a knowing violation carries treble damages, and the cure window is 14 days from notice.

The exemption most operators have never used

Under § 40.1-28.9, anyone under 16, and any full-time student under 18 working 20 hours a week or less, sits outside the Virginia minimum wage entirely. Federal $7.25 still applies.

That survived the 2026 amendments untouched. It is not a loophole to build a business on, and Virginia’s child labor rules are strict and got more expensive in 2024, with a civil penalty floor of $500 per violation and up to $25,000 where a child is seriously hurt. Sixteen and seventeen year olds may not touch a power-driven meat slicer, which is how a Jersey Mike’s franchisee in Ashburn, South Riding, Springfield and Sterling ended up paying $108,161.

But for a student running a host stand fifteen hours a week, the exemption is real and almost nobody uses it.

What to do before January

• Model $15.00 now, not $13.75. Both steps land inside sixteen months and the second one is bigger. A menu built for January is obsolete by the following January.
• Pull your labor as a percentage of sales and recompute it at both rates. If the second step breaks your model, you have fifteen months to change something, and menu prices are not the only lever.
• Reprint the tip-credit notice with the January figures, and check that your overtime premium for tipped staff is built on the full minimum wage.
• Look at the compression above the floor. A shift lead at $15.50 today is 21% above minimum. In January they are 13% above it, and in 2028 they are 3% above it. The cost of the increase is rarely just the people actually earning minimum.
• Post the current DOLI notice. The 2026 poster is on the DOLI site and the 2027 version will replace it.