Virginia PEO Laws: Registration, Bonding and Payroll Requirements
Virginia employers pay unemployment insurance on the first $8,000 of each employee's annual wages, and new employers start at a 2.5% base rate plus add-ons until they earn an experience rating. Virginia enacted a statewide paid family and medical leave program in April 2026, with payroll contributions beginning April 1, 2028.
| PEO registration or licensing required | Yes — a PEO must register with the Virginia Workers' Compensation Commission before providing professional employer services in Virginia (Va. Code §65.2-803.1); the application requires a VA-based representative for service of process and certification that the PEO and each client company are insured under §65.2-801 source (opens in new window) |
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| Regulating agency | Virginia Workers' Compensation Commission (VWC), Insurance Department — dual regulation with the SCC Bureau of Insurance, which oversees premium, pricing, rates and audits source (opens in new window) |
| Bond or security requirement | No fixed bond amount in statute or regulation. VWC may require a parent or commonly owned entity to guarantee the PEO's obligations in a form the Commission prescribes (§65.2-803.1); funding comes instead from an annual payroll-based assessment (16 VAC 30-100-70) source (opens in new window) |
| Registration renewal cycle | Annual — the client company and insurance report is filed electronically by 5 p.m. EST on January 31 each year (16 VAC 30-100-30); registration is not transferable source (opens in new window) |
| SUI taxable wage base | $8,000 (2026) source (opens in new window) |
| New-employer SUI rate | 2.5% base rate plus add-ons until experience-rated; experience rates 0.1%–“6.2% source (opens in new window) |
| State workers' comp fund | No — Virginia has no state fund and coverage is not available through the Commission; employers insure through a commercial insurer, an authorized self-insurer, a licensed group self-insurance association, or a registered professional employer organization (VWC Insurance Department) source (opens in new window) |
| State paid leave mandate | Yes — Paid Family and Medical Leave Insurance (SB 2 / HB 1207, enacted April 2026), administered by the VEC: payroll contributions begin April 1, 2028; benefits start December 1, 2028; up to 12 weeks at 80% of weekly wages. Contribution rate set annually by the VEC Commissioner (first rate due by October 1, 2027). Employers with 10 or fewer employees pay no employer share; larger employers may deduct up to 50% from wages source (opens in new window) |
| State minimum wage | $12.77/hour in 2026, with scheduled annual increases under Va. Code §40.1-28.10 source (opens in new window) |
| PEO SUI reporting basis | Not verified |
Sources
- VEC employer FAQ: taxable wage base is the first $8,000 of annual earnings — verified 2026-08-10
- VEC — unemployment tax for employers: initial base tax rate of 2.5% plus add-ons until experience-rated — verified 2026-08-10
- VEC — Virginia Paid Family and Medical Leave program page: timeline, 80% wage replacement, employer share rules — verified 2026-08-10
- Va. Code §65.2-803.1 — Requirements for registration as professional employer organization; annual assessment: registration with the Commission before services may be provided — verified 2026-08-10
- VWC Insurance Department: oversees employer and carrier compliance and PEOs; dual regulation with SCC Bureau of Insurance — verified 2026-08-10
- 16 VAC 30-100 — Regulations for Professional Employer Organizations: no bond; annual assessment formula in 16VAC30-100-70; parental guarantee per §65.2-803.1 — verified 2026-08-10
- 16 VAC 30-100 — Regulations for Professional Employer Organizations: 16VAC30-100-30 annual report due January 31 — verified 2026-08-10
- VWC Insurance Department: Virginia does not have a State Fund and coverage is not available through the Commission — verified 2026-08-10
- U.S. DOL — state minimum wages: Virginia $12.77 in 2026 — verified 2026-08-10
What we know about Virginia
Virginia's unemployment insurance tax is among the least expensive in the mid-Atlantic. The taxable wage base is $8,000 per employee per year — the lowest in the region, below the $9,000 DC base and the $9,500 West Virginia base — and once an employee's annual wages pass $8,000, no further Virginia UI tax is due on that employee for the year. The Virginia Employment Commission (VEC) publishes the wage base in its employer FAQ.
New employers pay the initial base tax rate of 2.5% plus add-ons until they have enough payroll history to receive a calculated (experience-rated) rate. Once experience-rated, rates are set from each employer's own claims history and generally range from 0.1% to 6.2%. Because the base is low and the starting rate moderate, per-employee UI cost for a new Virginia employer is roughly $200 per employee per year at the 2.5% base rate before add-ons.
Virginia's biggest payroll change in a generation is not UI at all: in April 2026 the General Assembly passed SB 2 / HB 1207, creating a statewide Paid Family and Medical Leave (PFML) insurance program administered by the VEC. The program will pay up to 12 weeks of job-protected leave a year at 80% of a worker's average weekly wage, capped at 100% of the statewide average weekly wage. The timeline is fixed: VEC regulation and program development runs through 2027; the Commissioner must establish the first contribution rate by October 1, 2027; payroll contributions begin April 1, 2028; and benefits become available December 1, 2028. Employers with 10 or fewer employees are not required to pay the employer share — they withhold and remit the employee portion. Larger employers pay the full premium and may deduct up to 50% of it from employee wages. Self-employed workers may opt in, and employers may apply to offer an approved private plan that meets or exceeds the state program's benefits.
For a PEO evaluating Virginia as a worksite state, three planning items stand out. First, the $8,000 wage base caps SUI cost per Virginia head at $500 even at the top of the experience-rate range, and far lower at the 2.5% new-employer rate. Second, PFML payroll contributions begin April 1, 2028 and the rate will not be known until the VEC Commissioner fixes it by October 1, 2027 — payroll systems should be built to accommodate a mid-2027 rate notice. Third, the VEC is running listening sessions through August 2026 and rulemaking is in its first stage (a Notice of Intended Regulatory Action was published in July 2026), so registration, notice and private-plan rules are still taking shape.
Employers become liable to register with the VEC after paying wages to employees in Virginia, and quarterly wage and contribution reports are filed through the VEC Employer Self-Service portal. PEO-specific questions — separate registration, bonding, and whether Virginia assigns SUI on the PEO's rate or the client's rate — are not yet verified here and remain in the research queue.
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