Virginia strengthens its ban on non-competition for “low-wage employees”
On March 24, 2025, Virginia Governor Glenn Younkin enacted S.B. 1218, which amends Virginia’s noncompete law, expands the definition of “low wage employees” with whom employers cannot enter into non-competition contracts.
Previously, a “low-wage worker” was defined as an employee whose weekly earnings averaged less than the Virginia average wage. This equates to $1,463 a week or $76,081 a year for 2025. The amendment expands “low-wage employees” to include all employees who are entitled to overtime pay under the federal Fair Labor Standards Act (FLSA) for hours worked above 40 in a week, regardless of their weekly average earnings. The amendment will go into effect on July 1, 2025. The law gives low-wage workers the right to sue any employer who violates the statute by enforcing a non-compete. If they win, the court can award liquidated damages, attorneys’ fees, and lost compensation. Employers can also be penalized by a civil fine of $10,000 for every violation of the law. Employers must also post a copy of this statute or a summary that has been approved by the Virginia Department of Labor and Industry along with other federal or state-required notices. Otherwise, they risk civil penalties.
Employers in Virginia who have employees should review their non-competition agreement to ensure compliance with the new amendment.
