By Connie Morrison —
Despite a carefully planned and adopted budget, Accomack County could face a budget shortfall of an estimated $241,000, thanks to the Virginia Overtime Wage Act, which was passed by the General Assembly in its last special session and goes into effect July 1.
Under the act, employers must pay hourly and salaried nonexempt workers for all hours worked over 40 hours per week.
Nonexempt employees have little say in how their work is done and are directly supervised by managers. Exempt employees are generally executive or managerial, or have technical expertise. The act also changes how overtime pay is calculated and includes penalties for noncompliance.
“We believe that we are looking at approximately $241,000 for the upcoming budget … that is not currently included in the budget,” Accomack County’s Chief Human Resources Officer Kathy Carmody told the Accomack Board of Supervisors at its June 16 meeting.
“I think you should be looking at a new revenue source,” County Administrator Mike Mason told supervisors, adding that $241,000 is “three-quarters of a penny on your tax rate.”
“This was originally touted as an act that would bring the commonwealth conformity or into closer alignment with the (U.S.) Department of Labor’s Fair Labor Standards Act, and it passed with little discussion or debate,” Carmody said.
Nonexempt county hourly employees already earn overtime pay, which is included in employee paychecks, but nonexempt salaried employees earn compensatory time at the rate of 90 minutes of comp time for every hour worked. Those employees are allowed to carry up to 120 hours of comp time, which equates to 80 hours of overtime worked. Comp time above the 120-hour threshold is paid Dec. 31 each year. If a nonexempt employee leaves the county, any unused comp time is paid in the final paycheck. Overtime hours require a supervisor’s approval and the authorization of department heads or constitutional officers.
Exempt employees earn one hour of comp time for each hour worked beyond the 40-hour workweek, and any exempt comp time balances are erased at the end of the year rather than being paid out and are not payable upon separation from the county.
Firefighters’ overtime pay is already budgeted for the coming year. Overtime for landfill employees is also in the budget.
Carmody said among the operations that could be affected are: Early voting, tax collection in the last week before payment due dates, the county’s audit, access to court records, and snow removal during weather emergencies.
“If the Virginia Overtime Wages Act legislation remains in its current form, much of this $241,000 bill is going to have to be filled with a new revenue source, perhaps one of those discussed during your 2022 budget deliberations,” Mason told the board.
“Little did we all think during the FY22 budget work sessions that we may be forced to implement a new tax just to implement the Virginia Overtime Wages Act, but that could very well be the case,” Mason added.
Among the possible sources discussed were meals and cigarette taxes. Mason said the meals tax would be the faster way to see revenue returned to the county.
Conflicting interpretations of the law led the county to request an opinion from outside counsel, which concluded it is the intention of DOLI “that come July 1, any nonexempt employee who works anywhere in the commonwealth, basically is going to be paid in wages and not in time,” Carmody said. The governor’s office has signaled it will look for a solution, but any resolution will have to wait for the General Assembly to come back into session.
Supervisor Robert cautioned the board not to rely on legislative changes. “Once the benefit is given, it’s going to be hard for the General Assembly to take it back,” he said. “We would be wise … to understand this is probably going to stay as it is. … Once employees start getting extra money in their paychecks as opposed to more hours … I can’t see a bunch of politicians changing that.”