Virginia is on track to raise its minimum wage to $15 per hour, but the proposal is drawing sharp warnings from small business advocates who argue the mandate could strain employers and push prices higher for consumers.
The legislation has cleared both chambers of the General Assembly and now awaits the signature of Gov. Abigail Spanberger, who has already signaled her support.
“Our members aren’t surprised that the minimum wage increase passed, but they’re frustrated and worried about what will happen next,” said Julia Hammond, state director for the National Federation of Independent Business (NFIB) in Virginia.
Hammond noted that many small businesses already pay above the state’s minimum wage but warned that a state-mandated increase could ripple across payroll structures.
“Raising the state minimum wage would put pressure on employers to pay more to stay competitive and force small businesses to raise prices to cover the costs of the mandate or else try to get by with fewer workers,” Hammond said. “Our members already are contending with rising prices. Raising the minimum wage is going to make a bad situation even worse.”
Under the measure, Virginia’s adjusted minimum wage of $12.77 per hour would rise to $13.75 beginning January 1. A second increase to $15 per hour would take effect January 1, 2028. Starting in 2029, future adjustments would be tied to inflation using the Consumer Price Index.
Supporters say the increase will provide meaningful relief to workers facing higher housing, food, and transportation costs. Spanberger endorsed the bill following its passage, stating she looks forward to signing legislation that would give Virginia workers a pay raise.
However, critics argue the broader economic consequences could outweigh the benefits. A report from the Employment Policies Institute cited research suggesting that minimum wage hikes are often associated with higher consumer prices, particularly in labor-intensive industries. The group referenced studies linking a $1 increase in the minimum wage to price increases of up to 5.5% in certain sectors.
State budget analysts also project fiscal impacts for the commonwealth. According to the Department of Planning and Budget, the measure would increase general fund spending by roughly $546,761 and nongeneral fund spending by about $489,371 in fiscal year 2027. Once the $15 wage takes effect, projected costs rise significantly, with estimates of approximately $14 million in additional general fund spending and $14.6 million in nongeneral fund expenditures in fiscal year 2028.
Meanwhile, NFIB has launched a statewide advertising campaign urging lawmakers and voters to consider the cumulative burden of rising labor mandates, regulatory requirements, and operational costs.
With the governor’s signature expected, Virginia is poised to join a growing number of states moving toward a $15 minimum wage — a shift that supporters frame as long overdue relief for workers and critics describe as a gamble for small businesses already navigating a challenging economic climate.
