Virginia’s new hire requirements give an employer a short list of things that must happen quickly: report the hire to the Virginia New Hire Reporting Center within 20 days, verify the person’s identity and work authorization on Form I-9, collect a federal W-4 and a Virginia VA-4 for tax withholding, classify the worker correctly as an employee or contractor, and make sure wage, insurance, and posting rules are in place before the first paycheck goes out. Miss any of these and the penalties range from small daily fines to five-figure civil penalties, and some violations strip you of legal defenses you would otherwise have in court.
Report the Hire Within 20 Days
Every Virginia employer must report newly hired and rehired employees to the Virginia New Hire Reporting Center within 20 days of the start date. The same 20-day rule applies to independent contractors, measured from the start of the contract.1Virginia Code Commission. Virginia Code 63.2-1946 – State Directory of New Hires; Reporting by Employers
The information mirrors what’s already on the W-4 or W-9: the worker’s name, address, Social Security number, and date of hire, plus your business name, address, and federal employer identification number. You can file by mailing a copy of the W-4 or W-9, submitting electronically, or using another accepted method. Employers who file electronically and have multiple hires must submit reports at least twice per month.
Verify Work Eligibility on Form I-9
Every employer in the United States must verify a new hire’s identity and work authorization using Form I-9. The employee fills out Section 1 on or before their first day of work. You then have three business days to examine the employee’s original identity and work-authorization documents and complete Section 2. A U.S. passport satisfies both identity and work authorization on its own; alternatively, a state-issued ID paired with a Social Security card works. Keep each I-9 on file for three years after the hire date or one year after employment ends, whichever is later.2U.S. Citizenship and Immigration Services. I-9, Employment Eligibility Verification
Employers enrolled in E-Verify have a permanent option for remote document examination. An authorized representative can examine documents over a live video call within three business days of the start date, and you note “Alternative Procedure” in the I-9’s Additional Information field and retain copies of the front and back of each document. Recorded video does not count; the interaction must be live. As of April 1, 2026, every I-9 must be completed through either in-person physical inspection or this permanent remote procedure.
Virginia does not require most private employers to use E-Verify. The mandate applies only to employers that averaged more than 50 employees over the prior 12 months and enter a state contract exceeding $50,000; those employers must register for E-Verify and use it for new hires performing work under the contract, and noncompliance can lead to debarment from future state contracts.3Virginia Code Commission. Virginia Code 2.2-4308.2 – Registration and Use of Federal Employment Eligibility Verification Program Required; Debarment Everyone else can enroll voluntarily, which is what unlocks the remote I-9 option above.
Collect Tax Withholding Forms
Have the new hire complete a federal Form W-4 so you can withhold the correct amount of federal income tax. The W-4 must be signed to be valid, and you record your business name, EIN, and the employee’s first date of employment in the employer section.4Internal Revenue Service. Form W-4: Employee’s Withholding Certificate (2026)
Virginia also requires Form VA-4, which sets state income tax withholding based on claimed exemptions. The employee should file it when employment begins. If a new hire doesn’t submit a VA-4, you withhold Virginia income tax as though they claimed no exemptions, which is the maximum withholding rate.5Virginia Department of Taxation. Form VA-4 Employee’s Virginia Income Tax Withholding Exemption Certificate
Classify the Worker Correctly
Before you run payroll, be sure the person is actually an employee and not a contractor, or vice versa. Virginia presumes that anyone performing services for pay is an employee. The burden falls on you to prove otherwise using the IRS guidelines, which look at whether you control how the work is done, whether you provide the tools and set the schedule, and whether the relationship looks more like employment than an independent business arrangement.6Virginia Code Commission. Virginia Code 40.1-28.7:7 – Misclassification of Workers
A misclassified worker can sue for lost wages, salary, employment benefits, and any expenses they personally paid that insurance would have covered, such as health care costs. Courts can also award attorney fees and litigation costs to the worker. Beyond private lawsuits, misclassification triggers back-tax liability for unpaid withholding, unemployment insurance, and workers’ compensation premiums.
Set Up Payroll to Meet Wage and Hour Rules
Minimum Wage
Virginia’s minimum wage is $12.77 per hour as of January 1, 2026, and the rate now adjusts annually based on the Consumer Price Index.7Virginia Department of Labor and Industry. Virginia Minimum Wage Rate Increasing Effective January 1, 2026 If the federal minimum wage ever rises above Virginia’s rate, you pay the higher amount.8Virginia Code Commission. Virginia Code 40.1-28.10 – Minimum Wages
Overtime
Under the Virginia Overtime Wage Act, non-exempt employees earn overtime at one and a half times their regular rate for every hour beyond 40 in a workweek.9Virginia Code Commission. Virginia Code 40.1-29.2 – Virginia Overtime Wage Act Virginia’s calculation often produces higher overtime pay than the federal method because the state does not allow the “fluctuating workweek” approach. Virginia divides a salary by 40 hours to set the regular rate, then applies the full time-and-a-half multiplier to every overtime hour, rather than dividing the salary by all hours actually worked and adding only a half-time premium.
To qualify as exempt from overtime, an employee must meet both the duties test and the salary threshold. The current federal threshold is $684 per week, or $35,568 annually.10U.S. Department of Labor. Earnings Thresholds for the Executive, Administrative, and Professional Exemptions Employees paid below that amount are generally non-exempt regardless of their job duties.
Pay Periods and Paystubs
Hourly employees must be paid at least every two weeks or twice a month. Salaried employees may be paid monthly.11Virginia Code Commission. Virginia Code 40.1-29 – Time and Medium of Payment; Withholding Wages; Written Statement of Earnings Wages can be paid in cash, by check, by direct deposit to an account the employee designates, or by loading a prepaid debit card. Direct deposit and debit card payments require the employee’s consent, though if a post-2010 hire doesn’t designate a bank account, you can default to a prepaid card so long as the employee gets at least one free withdrawal per pay period.
On each payday, provide a written or electronic paystub showing your business name and address, hours worked (for hourly workers and salaried employees paid below the FLSA exempt salary threshold), rate of pay, gross wages, and every deduction with its purpose. The statement must give the employee enough information to verify how gross and net pay were calculated.
Put Required Insurance in Place
Workers’ Compensation
If your business regularly employs more than two people, you must carry workers’ compensation insurance. Virginia counts part-time, seasonal, temporary, and family members toward that number, and if you hire subcontractors in the same trade, their employees count too.12Virginia Workers’ Compensation Commission. Employers You can purchase coverage through a private insurer, the Virginia Workers’ Compensation Insurance Plan, or apply for self-insurance certification.
Operating without coverage carries a civil penalty of up to $250 per day of noncompliance, capped at $50,000. The bigger exposure is that an uninsured employer loses the right to raise standard defenses if a worker gets hurt. You can’t argue the employee was negligent, that a coworker caused the injury, or that the employee accepted the risk. The Workers’ Compensation Commission can also order you to stop all business operations until you obtain coverage.13Virginia Code Commission. Virginia Code 65.2-805 – Civil Penalty for Violation of 65.2-800 and 65.2-804
Unemployment Insurance
Register for a Virginia unemployment insurance tax account if you pay at least $1,500 in wages during any calendar quarter or employ one or more workers for 20 weeks or more in a calendar year.14Virginia Employment Commission. Employer Information The Virginia Employment Commission assigns a contribution rate based on your experience rating, and you file quarterly wage reports and pay contributions on the first $8,000 of each employee’s annual wages.
Federal unemployment tax runs at a gross rate of 6.0% on the first $7,000 of each employee’s wages. Employers who pay state unemployment taxes on time receive a 5.4% credit, reducing the effective FUTA rate to 0.6%.15U.S. Department of Labor. FUTA Credit Reductions – Unemployment Insurance Falling behind on state payments puts that credit at risk.
Register for Tax Withholding and Know the Penalties
Register with the Virginia Department of Taxation to get a withholding tax account number before paying any employee. Based on each employee’s VA-4, withhold the appropriate amount of Virginia income tax from every paycheck. State withholdings are reported and paid on a schedule tied to your total tax liability, either monthly, semi-weekly, or quarterly.
At year-end, you file Form VA-6, an annual reconciliation of all Virginia income tax withheld during the year, and submit the state copies of each employee’s W-2 electronically.16Virginia Department of Taxation. Employer’s Annual or Final Summary of Virginia Income Tax Withheld Return
Virginia imposes a penalty of 6% of the amount you should have withheld for the first month you’re late, plus an additional 6% for each month the failure continues, up to a maximum of 30%. The minimum penalty is $10 even if no tax was actually due for that period.17Virginia Code Commission. Virginia Code 58.1-475 – Penalty for Failure to Withhold Interest accrues on top of penalties. On the federal side, you’re responsible for withholding and remitting Social Security tax (6.2% of wages up to the annual wage base), Medicare tax (1.45% of all wages), and federal income tax based on the employee’s W-4.
If You Run a Background Check, Follow the FCRA Sequence
If you use a third-party company to run background checks on job applicants, the federal Fair Credit Reporting Act imposes specific steps before and after the screening. Before ordering the report, give the applicant a standalone written disclosure that a background check will be conducted and get their written consent.18Federal Trade Commission. What Employment Background Screening Companies Need to Know About the Fair Credit Reporting Act
If you decide not to hire someone based on what the report reveals, you can’t simply send a rejection letter. First provide a pre-adverse action notice, a copy of the background report, and a summary of the applicant’s rights. Give the person a reasonable window (at least five business days is the widely recognized minimum) to review the report and dispute anything inaccurate. Only after that waiting period can you send the final adverse action notice, which must identify the screening company, state that the company did not make the hiring decision, and inform the applicant of their right to request a free copy of the report within 60 days.
Employers who use criminal history in hiring decisions must also avoid practices that disproportionately screen out applicants based on race, national origin, or other protected characteristics.19U.S. Equal Employment Opportunity Commission. Background Checks
Post the Required Notices
Virginia employers must display both federal and state-required workplace posters where employees can see them. Federal notices cover minimum wage under the Fair Labor Standards Act, the Family and Medical Leave Act (for covered employers), and the Employee Polygraph Protection Act, among others. The Department of Labor provides a poster advisor tool to help determine which federal notices apply.20U.S. Department of Labor. Workplace Posters
State-required posters cover occupational safety and health, reasonable accommodations for pregnancy, unemployment insurance notice to workers, workers’ compensation notice, the Virginia Earned Income Tax Credit, and the Virginia Credit for Low-Income Individuals, among others.21Virginia Department of Labor and Industry. Required Workplace Posters Missing posters are easy to overlook and easy to fix, but they do trigger violations during inspections.
Health Coverage Kicks In at 50 Employees
Employers with 50 or more full-time equivalent employees are classified as Applicable Large Employers under the Affordable Care Act and must offer affordable health coverage to full-time workers or face potential penalties. For the 2026 plan year, coverage is considered affordable if the employee’s share of the lowest-cost self-only plan does not exceed 9.96% of their household income. You also file Forms 1094-C and 1095-C with the IRS and provide copies of Form 1095-C to eligible employees. Smaller employers are not subject to this mandate but may still choose to offer coverage.