2023 VA Minimum Wage Guide for Restaurants

2023 VA Minimum Wage Guide for Restaurants

July 13, 2023

What is the minimum wage in Virginia in 2023?

In 2023, the minimum wage in VA state is $12.00. Below is VA’s minimum wage over the last 6 years. In 2020, Virginia regulators passed legislation to increase the minimum wage to $15.00 by 2026.

  • 2018 - $7.25

  • 2019 - $7.25

  • 2020 - $7.25

  • 2021 - $9.50

  • 2022 - $11.00

  • 2023 - $12.00

Source: Virginia Minimum Wage by Labor Law Center

How is the Virginia minimum wage set?

The minimum wage is influenced by various factors, and three core variables that often dictate the minimum wage are:

  1. Local Living Expenses: The cost of living reflects the money needed for essentials like housing, food, healthcare, and transportation in a particular area. When the cost of living is high in a region, there's a bigger chance people will ask for a higher minimum wage to cover their basic needs properly.

  2. Demand vs Supply in the Labor Market: The state of the local labor market significantly impacts the minimum wage. In a robust job market with a shortage of workers, employers may offer higher wages to attract and retain employees, while in a sluggish market with high unemployment rates, there might be less pressure to raise wages, even for minimum wage positions.

  3. Local Inflation: Inflation causes the prices of goods and services to keep going up, which reduces the purchasing power of money. To maintain the value of the minimum wage over time, it should be adjusted to match inflation. Not doing so would make it difficult for workers to afford the same goods and services as before, leading to a decline in their standard of living.

Virginia State vs. Federal Minimum Wage

As mentioned earlier, Virginia passed legislation in 2021 to raise the minimum wage to $15.00 by 2026. Virginia is one of the many states raising their minimum wage to the $15.00 mark.

The Fair Labor Standards Act (FLSA) is a federal law that connects the state minimum wage and federal minimum wage by establishing specific labor standards and protections for employees in the United States. Through the FLSA, the federal minimum wage is set, and states are given the choice to either adopt the federal minimum wage or establish a higher minimum wage that applies exclusively within their state borders.

Here's how the state minimum wage and federal minimum wage are connected:

  1. Federal Minimum Wage: The federal minimum wage established by the FLSA is $7.25 per hour. This means that, under federal law, covered employees are entitled to earn at least $7.25 per hour for their regular working hours.

  2. State Minimum Wage: Each state has the authority to set its own minimum wage. If a state chooses to set a minimum wage that is higher than the federal minimum wage, employers within that state must comply with the higher state minimum wage.

  3. Higher of the Two: If a state has a minimum wage that is higher than the federal minimum wage, employees in that state are entitled to receive the higher rate. The state minimum wage takes precedence over the federal minimum wage.

  4. Lower of the Two (Preemption): If a state's minimum wage is lower than the federal minimum wage, employers must follow the federal minimum wage rate instead. The FLSA preempts state laws that provide for a lower minimum wage than the federal standard.

Ways to Pay Staff More

Restaurant margins are thin, but there's a great way to enhance staff compensation—by improving gratuity. It's a win-win situation for restaurant owners, customers, and both sides of the house.

  1. Utilize Table-side POS Service: Handheld tablets and table-side POS systems not only increase overall sales but also provide added convenience for guests, speeding up service and leading to higher tips for your staff.

  2. Spend Extra on Hosts and Hostesses: A strong greeting sets the stage for big tips! Don't skimp on your host staff; customers expect short wait times, acknowledgment of reservations, and friendly attention, especially during busy times.

  3. Encourage Credit Card Tipping: Offering a quick and convenient payment method enhances the guest experience and significantly boosts tips, while also improving overall sales and service efficiency.

  4. Always Upsell: Increasing the bill by 10% results in 10% higher tips! Proper training is essential, so ensure your staff knows how to upsell. Design your menu to encourage upselling, benefiting both the staff and customers

  5. Increase Your Table Turnover Rate: Serving more customers means potential for higher tips! Achieving a swift table turnover rate, ideally within 45 minutes per guest, leads to substantial tip pools for your staff every night.

More Margins = More Opportunity to Pay More

If you can afford to pay more, you’ll generally hire higher quality staff who stay longer! But your thin margins will make this difficult. Improving margins opens up more opportunities for competitive compensation in the restaurant industry.

  1. Use POS Tech to Boost Margins: Embrace advanced technologies like point-of-sale systems, online orders, and reservation platforms to streamline service efficiency. Implement intelligent staff scheduling during peak times and cost-effective labor management during slower periods.

  2. Micromanage Your Costs: Take a proactive approach to managing food and beverage costs by closely managing inventory, minimizing waste, negotiating with suppliers for favorable deals, and considering bulk purchases. Regularly review the menu to make necessary adjustments to account for changing ingredient costs.

  3. Smart Menu Design for High Margins: Analyze which menu items bring in the most revenue and give them prominence. Consider incorporating popular or unique ingredients to justify higher prices for certain dishes. Adjust prices, portion sizes, and ingredients to maximize profits while ensuring customer satisfaction.

Final Thoughts

Staying informed about the latest wage laws and implementing savvy strategies to enhance compensation allows restaurant owners to create a remarkable work environment, attract top talent, and ensure their amazing staff feels valued and motivated to deliver exceptional service. And you know what? All of this contributes to the roaring success and remarkable growth of their establishment.

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