For small business owners in Burke, mark January 1 on your calendar. Virginia's minimum wage will increase to $13.75 per hour.

Currently, it is $12.77, which means an increase of $0.98 per hour. While it may not seem like much at first glance, when you multiply it by the number of employees and hours worked, the impact becomes significant.

First, let's confirm that this is official. Governor Spanberger signed the HB1 and SB1 bills on April 9, 2026.

The bill outlines a phased increase. It will be $13.75 on January 1, 2027, and $15.00 on January 1, 2028.

Starting in 2029, it will be automatically adjusted each year based on the Consumer Price Index (CPI). This means that $15.00 is not the final amount; it will continue to change thereafter.

So, how much more will it cost our business? This is likely the most pressing question, and I've done a simple calculation.

If you have one full-time employee working 40 hours a week, it will cost an additional $39.20 per week. Over a year, assuming 2,080 hours, that totals $2,038.40.

But that's not all. When wages increase, the employer's FICA (Social Security + Medicare) contribution of 7.65% also rises.

If you employ three full-time workers, your labor costs will increase by over $6,000 a year. Honestly, I was a bit surprised when I first calculated this.

The same applies to part-time employees. For a part-time worker working 20 hours a week, it will cost an additional $1,019.20 a year, so businesses relying on part-time staff should not overlook this in their calculations.

And for those thinking, "We don't have many employees, so it should be fine," that's not the case. Virginia's minimum wage does not have exceptions based on the number of employees or revenue size.

There was a proposal in the past to exempt small businesses with fewer than 10 employees, but it was rejected by the state Senate committee in 2022.

Many are asking if it varies by county. Virginia follows the Dillon Rule, meaning counties or cities cannot set their own minimum wage. Fairfax County will adhere to the state standard.

Restaurant owners should pay close attention to tipped employees. Employees who earn more than $30 in tips per month can have their cash wage reduced to $2.13 per hour.

However, if the combined total of their wage and tips does not meet the state minimum wage, the employer must make up the difference. Starting next year, that baseline will rise to $13.75.

For businesses that have many slow weekday lunch hours with low tips, the difference may occur more frequently than expected. I recommend reviewing this by time slot.

So, what should you do? If I were an employer, I would take the following steps.

First, identify which employees are currently earning between $12.77 and $13.75. These are the individuals who must receive a raise by law.

Second, also review employees who are already earning around $14. If a new hire is making $13.75, it can create dissatisfaction among longer-tenured employees.

Third, request your payroll program or accountant to adjust the hourly wage starting January 1. It's easy to forget during the busy end-of-year period.

Fourth, check your pay stub format. In Virginia, employers must provide a statement each pay period that includes the employer's name and address, hours worked, hourly wage, total pay, and deductions.

Fifth, ensure that hourly employees are paid at least bi-weekly or twice a month. Paying once a month is not allowed.

Sixth, review your schedule. If you have staff concentrated during slow hours, adjusting just those times can help absorb some of the wage increase.

Note that posting minimum wage posters is not mandatory in Virginia. However, the Department of Labor and Industry (DOLI) provides guidance, so displaying it can help reduce misunderstandings with employees.

If you plan to raise menu prices or service fees, it's better to do it gradually in November and December rather than all at once in January to avoid a sharp reaction from customers. This is something I've observed from nearby businesses.

Personally, I don't oppose minimum wage increases outright, but I believe that the pace of reaching $15 in just two years is a bit tough for small businesses.

However, the law has already passed, and complaining won't change anything. Ultimately, businesses that prepare early will be less affected.

And considering the $15 mark in 2028, it's wise to simulate both increases when planning for next year. There's no need to be surprised again in a year.

If you have questions, you can contact the Virginia Department of Labor and Industry (DOLI) directly at (804) 786-2706. For ambiguous cases, it's safest to consult with an accountant or labor expert.