Recent legislative activity in the Virginia General Assembly signals a major shift in the state’s employment law landscape. Identical bills House Bill 5 (HB5) and Senate Bill 199 (SB199), which have passed both chambers and were communicated to the Governor on March 31, 2026, aim to significantly expand paid sick leave mandates to nearly all private and public employers in the state. If signed, the legislation would significantly expand paid sick leave requirements to cover most private and public employers across the state.
The proposed law represents a clear departure from Virginia’s current framework, which applies paid sick leave obligations only to a limited group of workers, such as certain home health employees. Under the new mandate, employers would be required to provide accrued paid sick leave at a rate of one hour for every 30 hours worked, with core provisions expected to take effect July 1, 2027.
Key Provisions of HB5 and SB199
The proposed legislation introduces several critical requirements that employers must navigate:
- Accrual and Carryover: Employees would accrue leave at a rate of one hour for every 30 hours worked, with an annual accrual and use cap of 40 hours, unless the employer chooses a higher limit. Unused leave must be allowed to carry over to the following year.
- Expanded Use (Sick and Safe Leave): Beyond personal or family illness, the bills introduce “safe leave.” This allows employees to use accrued time to seek medical care, counseling, legal services, or relocation assistance if they or a family member are victims of domestic violence, sexual assault, or stalking.
- Broad Coverage: The mandate applies to all private employers, as well as state and local government entities, regardless of size.
- Job Protection and Continuity: Accrued leave must remain with the employee if they are transferred to a different division or location. Furthermore, employees retain their accrued leave under a successor employer or if rehired within 12 months.
- Notice and Documentation: Employers can require notice for the use of leave only if they have a previously distributed written policy. Notably, employers are prohibited from requiring highly specific details regarding the health condition or domestic violence situation as a condition for providing leave.
Enforcement and Penalties
The legislation grants the Commissioner of Labor and Industry the authority to oversee implementation, with several provisions taking effect on July 1, 2027.
- Civil Penalties. Knowing violations may result in fines ranging from $150 for a first offense to $500 for successive violations.
- Private Right of Action. The bill authorizes a private civil right of action. Aggrieved employees may recover double the amount of any unpaid sick leave plus actual damages.
Next Steps for Employers
While the final effective date for several provisions is slated for 2027, employers should begin preparing for the administrative and financial impact of these changes:
- Review PTO Policies: Evaluate whether your current Paid Time Off (PTO) or vacation policies meet the minimum accrual (1:30) and usage requirements of the new law. Employers with existing plans that meet these standards may not need to provide additional leave.
- Audit Tracking Systems: Ensure your payroll or HRIS systems can track accruals for all employees, including part-time and seasonal staff who may now be eligible.
- Draft Written Policies: Because notice requirements can only be enforced through a distributed written policy, start drafting clear guidelines for how and when employees must request leave.
- Budget for Increased Costs: Some estimates suggest the mandate could represent a 3.3 percent to 3.7 percent increase in payroll costs when including employer taxes.
- Consult Legal Counsel: Given the new private right of action and double-damage penalties, seeking legal advice to ensure policy compliance is highly recommended.
