When examining the plain language of Virginia Code § 40.1-29, which ensures timely wage payments to employees, it does not explicitly state whether it extends protections to executive personnel. From a commonsense perspective, one might argue that executive personnel are inherently employees and should therefore be protected under this statute.
However, historically, the law has distinguished between executive and non-executive employees regarding wage requirements. For instance, the Fair Labor Standards Act (FLSA), the federal counterpart of § 40.1-29, clearly differentiates between executive and non-executive employees. This distinction is significant because federal labor and employment laws recognize fundamental differences between these categories.
For example, to qualify as an exempt executive employee under section 13(a)(1) of the FLSA, an employee must meet specific criteria.
- Compensated on a salary basis at a rate of not less than $684 per week (or $455 per week if employed in the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, or the U.S. Virgin Islands by employers other than the Federal Government, or $380 per week if employed in American Samoa by employers other than the Federal Government), exclusive of board, lodging or other facilities;
- Whose primary duty is the management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof;
- Who customarily and regularly directs the work of two or more other employees; and
- Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees are given particular weight.
29 CFR 541.100.
Both the Fourth and Second Circuit Courts of Appeals recognize executive and non-executive employees as distinct categories, with executive employees not being subject to the same wage payment laws as non-executive employees. For instance, in Emmons v. City of Chesapeake, 982 F.3d 245, 257-258 (4th Cir. 2020), the Fourth Circuit stated that "there is an underlying thread of rationality to the [Fair Labor Standards Act] and its regulations, which is that hourly workers who are the bulk of many a workforce are covered, but that those who operate in managerial capacities are not." Similarly, the Second Circuit has noted that the broad purpose of the executive exemption is "to distinguish managerial employees from non-managerial employees." These cases strongly indicate that, in terms of enforcing wage payment laws, executive and non-executive employees are inherently separate categories.
Does the Virginia's Tipped Employees Statute Lend Any Clues?
Conversely, one could argue that executive employees are considered employees under the Tipped Employees Statute, Virginia Code § 40.1-28.9, which specifically applies to tipped employees. The statute lists 16 exceptions to its definition of an employee, but executive personnel are not among these exceptions. Therefore, it could be argued that executive employees are not exempt from the protections provided under § 40.1-29.
On the other hand, one might contend that the statute does not list executive personnel as an exception because it is inherently inapplicable to them. From a common-sense perspective, executive personnel typically do not receive tips and thus are not considered tipped employees. The title of § 40.1-28.9—Definitions; determining wage of tipped employee—supports the conclusion that the statute applies only to tipped employees, not executive employees.1
Additionally, under § 40.1-28.9, a "tipped employee" is defined as "an employee engaged in an occupation in which he customarily and regularly receives more than $30 per month in tips from persons other than the employee's employer." Since executive personnel do not typically receive more than $30 per month in tips from individuals other than the company, it is unclear whether the omission of executive personnel from the exceptions to the definition of an employee under the tipped employees statute indicates that they are considered employees for the purposes of receiving protections under Virginia's wage payment statute, § 40.1-29.
Conclusion
To avoid confusion and to comport with the delineations articulated under federal law, the Virginia General Assembly should amend § 40.1-29 to define exactly what it considers to be an employee, and specifically determine whether executive personnel are included as a protected class under the statute.
Footnote
1. See Byrd v. Commonwealth, 124 Va. 833, 836 (1919) ("In determining the meaning of a statute, it is proper to refer to the title of the act."); see also Foster v. Commonwealth, 44 Va. App. 574, 580 (Va. Ct. App. 2004) ("The title of the statute might suggest that interpretation[.]").
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