Virginia Continues Expanding Employee Protections with New Restrictions on Non-Competes, Paid Leave Requirements, and Pay Transparency Obligations

Virginia recently enacted several employment-related measures that increase employee protections and expand employer compliance obligations.  The new laws affect restrictive covenant practices, compensation transparency, and leave administration.  Many Virginia employers will need to revisit existing agreements, hiring procedures, and workplace policies before the laws take effect.

Virginia Further Limits Enforceability of Non-Compete Agreements

Virginia has enacted another significant limitation on the use of employee non-compete agreements, reflecting the state’s continued efforts to narrow the permissible scope of post-employment restrictive covenants.  Effective July 1, 2026, Virginia employers generally may not enforce a non-compete agreement against an employee who is terminated without cause unless the employer provides severance or another monetary benefit tied to the restriction.

The amendment expands Virginia’s already restrictive non-compete framework, which previously focused primarily on “low-wage employees.”  Under the new law, employers seeking to preserve enforceability following a without-cause termination must provide compensation in exchange for the restriction and disclose that compensation arrangement when the agreement is executed.

Employers with Virginia employees should review:

• Existing non-compete templates;
• Severance practices and separation agreements;
• Definitions of “cause” used in employment agreements and policies; and
• Alternative protections, including confidentiality, non-solicitation, and trade secret provisions.

Because the law focuses heavily on the circumstances surrounding termination and compensation disclosures, employers should coordinate agreement revisions with their onboarding and separation procedures before the July 2026 effective date.

Virginia Enacts Pay Transparency and Salary History Restrictions

Beginning July 1, 2026, Virginia employers will face new pay transparency obligations and restrictions on salary history inquiries during the hiring process.  Under the new law, covered employers must include wage or salary ranges in both external and internal job postings.  The ranges must be established in good faith and apply to opportunities involving hiring, promotion, or transfer.  The law prohibits employers from:

• Requesting an applicant’s wage or salary history;
• Relying on compensation history in hiring decisions; or
• Using prior compensation to determine starting pay, unless the applicant voluntarily discloses that information without prompting.

It also includes anti-retaliation protections for applicants who decline to provide salary history information or request compensation range details.

Multistate employers should be mindful that state and local pay transparency requirements continue to vary considerably with respect to posting obligations, timing, covered positions, and permissible range breadth.  To prepare for compliance, employers should:

• Review recruiting and interviewing protocols;
• Update job posting templates;
• Train recruiters and hiring managers regarding prohibited inquiries;
• Evaluate compensation structures and range-setting methodologies; and
• Ensure consistency between published ranges and actual compensation practices.

Virginia Adopts Statewide Paid Family and Medical Leave Program

Virginia also recently enacted a statewide paid family and medical leave (“PFML”) program.  The new program will provide eligible employees with paid leave benefits for qualifying family and medical reasons, including bonding leave, an employee’s serious health condition, care for certain family members, and absences related to domestic violence, stalking, or sexual assault.

The program will be administered and paid by the Virginia Employment Commission, with funding from payroll contributions shared by employers and employees.  Contribution collection is scheduled to begin April 1, 2028, with benefits expected to become available December 1, 2028.

Employers with more than 10 employees generally will be responsible for employer-side contributions, although the law permits employers to deduct a portion of the required contributions from employee wages.  Smaller employers are exempt from the employer contribution requirement but still must facilitate employee payroll deductions.  The law allows employers to seek approval for compliant private plans, which may appeal to employers that already maintain robust paid leave benefits.

Although implementation remains several years away, employers may want to begin evaluating:

• Existing paid leave and short-term disability programs;
• Payroll and contribution administration capabilities;
• Coordination with federal and state leave obligations; and
• Whether a private-plan option may ultimately be preferable.

These developments add to the increasingly complex patchwork of state paid leave requirements facing multistate employers.

Key Takeaways for Employers

Virginia’s recent legislative activity continues the Commonwealth’s expansion of employee-focused workplace protections and related employer compliance obligations.  Employers with Virginia operations should begin reviewing their policies, agreements, and hiring practices now to prepare for compliance.

In light of these developments, employers should consider proactively reviewing existing onboarding agreements, recruiting materials, and workplace leave policies to identify revisions needed before the laws become effective.  For assistance, please contact one of Honigman’s Labor and Employment Attorneys here.