Following the 2026 legislative session, Virginia’s employment law landscape is shifting with the enactment of several new employee-friendly measures, and even more on the horizon. Here are the key developments for which employers should be prepared.
Non-Compete Agreements
Virginia’s non-compete statute was amended to prohibit the enforcement of non-compete agreements unless the employer provides “severance benefits or other monetary payment.” For the restriction to be enforceable, the severance benefits or monetary payment must be disclosed at the time the non-compete agreement is executed. Notwithstanding this change, employers can still enforce non-competes without providing severance benefits, but only if they fire an employee for “cause.” However, the statute does not define “cause.” The amendment applies prospectively to employment agreements entered on or after July 1, 2026.
Practically speaking, employers will likely want to update their standard non-compete and/or employment agreements to include a contingent severance provision, under which the employee may receive a severance payment (or other benefit) if they are fired without cause.
Notably, the statute provides a private cause of action against employers who try to enforce an unlawful non-compete, under which an employee may recover lost compensation, attorney’s fees, and other damages. It also provides for a $10,000 civil penalty per violation, which may be assessed by the Commissioner of Labor and Industry. See SB 170.
A separate bill pending before Governor Abigail Spanberger would further prohibit the enforcement of non-compete agreements against health care professionals, defined as “any person licensed, registered, or certified by the Board of Medicine, Nursing, Counseling, Optometry, Psychology, or Social Work.” The bill contains some exceptions, such as permitting the enforcement of certain non-solicitation provisions, as well as reasonable non-compete agreements in connection with the sale of a health care business. It would also permit employers to recoup recruitment-related costs from a departing employee who is employed for less than five years. See SB 128, HB 627.
Hiring Practices and Salary Transparency
Under a new statute, employers are prohibited from seeking or relying on a prospective employee’s wage or salary history in making employment decisions. For example, employers cannot ask an applicant about their wage or salary history, rely on an applicant’s wage or salary history in determining whether to hire them or in setting their initial compensation, or refuse to interview or hire an applicant for failing to disclose their wage or salary history.
Additionally, employers must disclose a good faith pay range for internal and external job postings. The statute allows the Attorney General to recover civil penalties from violating employers in an amount up to $1,000 for the first violation and up to $5,000 for subsequent violations. It also provides a private cause of action for aggrieved individuals, and allows claims to be brought individually, collectively, or on behalf of a prospective class. However, employers are afforded an opportunity to cure a defective job posting before an action can be brought on that basis. See HB 636, SB 215.
Paid Leave Benefits
Virginia now joins other jurisdictions, including D.C. and Maryland, in adopting a statewide paid family and medical leave insurance program. The program will be funded through payroll taxes, with contributions beginning April 1, 2028. The Virginia Employment Commission will administer the program and set the contribution rate each year. Employers of more than 10 employees must deduct at least 50% of the required contribution from employees’ wages and pay the rest themselves, whereas companies with 10 or fewer employees must only make the 50% deduction from wages, but no additional contribution. Employees will be eligible for benefits beginning December 1, 2028 in an amount equal to 80% of their average weekly wages for a maximum of 12 weeks per benefit year. See SB 2.
Additionally, a bill pending before the Governor would expand Virginia’s current paid sick leave statute. This bill maintains employees’ current accrual rate of at least one hour of paid sick leave for every 30 hours worked, not to exceed 40 hours per year unless the employer selects a higher limit. However, it would expand the qualifying purposes for which an employee may use paid sick leave, such as seeking physical or mental health treatment, taking care of a sick family member, or seeking safety services after experiencing domestic violence. The bill would also offer new enforcement mechanisms, such as civil penalties for violations and a private cause of action. Under the newly proposed private cause of action, an employee who successfully sues for a violation of the law would be entitled to recover twice the amount of any unpaid sick leave, twice the amount of actual damages, injunctive and other equitable relief, lost wages, interest, and reasonable attorney’s fees and costs. If signed, the bill would take effect on July 1, 2027. See HB 5.
Minimum Wage and Overtime
Effective January 1, 2026, Virginia increased its minimum wage to $12.77. The minimum wage will increase again in 2027 and 2028, to $13.75 and $15.00 respectively.
Additionally, Virginia’s legislature enacted overtime protections for workers providing domestic services, such as childcare, housekeeping, and other similar services. Effective July 1, 2027, these workers, whether classified as employees or independent contractors, will be entitled to overtime of not less than one and a half times their regular rate for hours worked in excess of 40 hours per week. The law does not apply to an au pair under the federal au pair program. See SB 1, SB 28.
Virginia Human Rights Act
Employers may face increased exposure with the expansion of the Virginia Human Rights Act (“VHRA”). Significantly, the definition of “employer” was broadened to include employers of five or more employees, down from the previous threshold of 15 employees. As a result, small employers that are not otherwise covered by federal EEO laws like Title VII, will now be subject to the VHRA’s anti-discrimination provisions. Separately, educational institutions are now subject to the VHRA’s provisions governing nondiscrimination in places of public accommodation. See SB 637.
Two other bills proposing further expansions to the VHRA are pending before the Governor. These bills would add menopause and perimenopause as protected categories under the VHRA’s prohibition on sex and gender discrimination, and would extend the timeframe for bringing a charge of discrimination from 300 days to two years. These bills were originally passed by the General Assembly and sent to the Governor for signature, but the Governor did not sign them in their original form, and instead returned them to the General Assembly with recommendations. Specifically, Governor Spanberger proposed reducing the proposed timeframe for bringing a discrimination charge to one year—not two—and recommending removing the language making menopause and perimenopause protected classes; rather, the Governor proposed a study to evaluate menopause and perimenopause in the workforce and best practices for accommodations in employment environments. The General Assembly did not vote on the Governor’s recommendations and sent the bills back to the Governor in their original form. It is unclear whether they will ultimately be signed into law. See SB 925, HB 1173, SB 258.
Employer Action Checklist
Here are some practical steps to ensure your business’s practices align with these changes in Virginia law:
- Review non-compete agreements and revise to ensure their enforceability in light of the new severance requirement
- Audit job postings to conform to the new salary transparency law and train hiring manages not to inquire about wage history
- Budget for upcoming payroll contributions under the paid family and medical leave insurance program
- Evaluate leave policies and practices for compliance (pending passage of bill)
- Ensure current wage rates reflect the new minimum wage
- Update internal discrimination and accommodation policies (pending passage of bill)
We will continue to monitor these developments closely.
