The 2026 Virginia General Assembly session again resulted in numerous pieces of employment legislation being enacted that will impact Virginia employers. Covering a wide variety of topics ranging from restrictive covenants, pay transparency, and discrimination protections, there are numerous new laws, many taking effect on July 1, 2026, that are relevant to Virginia employers.

Restrictive Covenants and Non-Competes

In the past several years, we have seen significant movement in Virginia to limit the scope of restrictive covenants and non-compete agreements.

1. In 2020, Virginia enacted § 40.1‑28.7:8, which prohibited employers from entering into non-compete agreements with “low wage employees.” A “low wage employee” is an employee earning below the average weekly wage in Virginia as published by the Virginia Department of Labor and Industry (DOLI). As of calendar year 2025, the average weekly wage is $1,507.01, equating to a yearly salary of $78,364.52. 
2. In 2025, Virginia expanded the scope of § 40.1‑28.7:8 to now also include all non-exempt employees (i.e., those eligible for overtime).
3. In 2026, two additional laws were passed. You can read about the new Virginia legislation impacting healthcare providers in the article written by my colleague Michael Garrison. The second piece of legislation, Senate Bill 170, again amended § 40.1‑28.7:8. Effective with agreements executed on or after July 1, 2026, SB 170 makes non‑competes unenforceable against employees who are discharged without cause unless they are provided “severance benefits or other monetary payment.”

While the law does not dictate what level of severance or monetary payment is required, the law does require that the benefits or severance be disclosed “upon execution of the covenant not to compete.” Employers executing non-compete agreements at the start of employment will need to revise their agreements to set forth appropriate severance or monetary benefits that would be paid if an employee is terminated without cause.

Pay Transparency

Under newly passed SB 215, which adds § 40.1-28.7:12 to the Code of Virginia, employers are now prohibited from (i) seeking the wage and salary history of a prospective employee; (ii) relying on wage and salary history when considering a prospective employee for employment; or (iii) refusing to hire or retaliate against a prospective employee for refusing to provide their salary or wage history. A prospective employee may voluntarily disclose their prior wages or salary in order to negotiate after receiving an initial offer of employment.

The law also imposes affirmative duties on employers to create a salary range for positions and to post publicly and in internal postings, the salary or salary range for the position.

The law creates a private right of action, allowing employees to bring an action within one year of the date their rights were violated. For claimed violations of the employer’s duties to create a salary range and to post that range in its job advertisements, SB 215 creates a limited right to cure, giving the employer 15 business days to cure before suit can be brought.

Beginning July 1, 2026, employers will need to ensure they are in compliance with this new law, including ensuring their job postings state a salary or salary range.

Revisions to the Virginia Human Rights Act

There were numerous changes to the VHRA this legislative session via SB 637 and HB 925. First, the statute of limitations under the VHRA has now been expanded from 300 days to two years. Second, the VHRA now applies to employers with five or more employees (previously the law applied to employers with 15 or more employees). Finally, employees may proceed to file a civil complaint if more than 180 days have passed since filing an administrative claim with the Office of Civil Rights or a local human rights commission organization.

This multi-faceted expansion of the VHRA will have far-reaching implications for employers. Not only will it apply to more employers than Title VII, but it will also expand the time period within which to bring a claim. The expansion of the VHRA in recent years will certainly result in more claims being filed under state – rather than federal – law.

Wage and Hour Laws

In the 2026 Legislative Session, there were numerous amendments to the laws impacting wages paid to employees, including to the Virginia Wage Payment Act, codified at § 40.1-29. Consistent with the already applicable three-year statute of limitations to bring a claim under this section, employers must now keep paystubs or online accounting for three years following the date of work performed. The amendments also created a good faith defense to wage violations, which reads as follows:

In any action to recover unpaid wages commenced on or after July 1, 2026, if the employer shows to the satisfaction of the court or the Commissioner that the act or omission giving rise to such action was in good faith and that the employer had reasonable grounds for believing that his act or omission was not in violation of this article, the court or the Commissioner shall not award any additional damages or impose any additional penalties. An employer shall not claim the good faith defense unless such employer cures the violation within 14 days of being notified of the violation by paying all wages unlawfully withheld.

This good faith defense means that employers will need an established process in place to receive and process any claims by employers that their wages were improper.

There were also amendments to § 40.1-28.7:7 governing the misclassification of workers, i.e., classifying an employee as an independent contractor or 1099. Under these amendments, misclassified workers now have three years to bring a cause of action.

Changes Effective in 2027 and 2028

While most new employment laws discussed above take effect on July 1, 2026, there are several laws that will take effect beginning in 2027.

Ongoing Rises in Minimum Wage

Virginia has been on a path towards increasing its minimum wage over the last several years. Currently, the minimum wage in Virginia is $12.77 per hour. Pursuant to SB 1, Virginia is now on track to reach a $15.00 per hour minimum wage by January 1, 2028. Effective January 1, 2027, minimum wage will increase to $13.75 per hour, and on January 1, 2028, minimum wage will rise to $15.00 per hour.

Employers who have a contingent of hourly workers will need to ensure their payroll records are updated to reflect the change in hourly base pay and applicable overtime. Employers in tipped professions need to ensure they are updating their Tip Credit Notices effective upon the change in the hourly wage rate.

Paid Sick Leave in 2027

Effective on July 1, 2027, pursuant to Senate Bill 199/House Bill 5 (HB5), Virginia is amending § 40.1‑33.6:1 et seq., to require private employers to provide paid sick leave. The law is immediately applicable to employers with 50 or more employees. Beginning January 1, 2028, the law will apply to employers with 25 or more employees, and on January 1, 2029, the law will apply to employers with at least one employee.

All employees will accrue paid sick leave equal to one hour of paid sick leave for every 30 hours worked. Employees may not use more than 40 hours of paid sick leave per year unless agreed upon with the employer. Leave may be taken in hourly increments for the employee’s own needs for a “family member” as specifically defined by the statute. Accrued but unused sick leave does not carry over from year-to-year, and it need not be paid out at termination or separation.

Employees are required to provide “good faith” notice of the need for paid sick leave for foreseeable absences. In cases where advanced notice is required pursuant to a company policy, the law requires that it be written. As such, employers should review their policies to ensure current policies are compliant with this new law.

The law provides for a private right of action by an aggrieved employee and will award damages up to double the amount of unpaid sick leave and actual damages suffered. 

Paid Family Leave in 2028

SB 2 creates Virginia’s first paid family leave law, to be codified at § 60.2-800 et seq. The law requires the Virginia Employment Commission to establish a paid family and medical leave insurance program by January 1, 2028. Employers will be able to begin making contributions beginning on April 1, 2028, and benefits are to be paid beginning December 1, 2028. Alternatively, the employer can seek Commission approval of a private plan meeting the requirements of this new law.

This new law applies to “covered individuals,” which are individuals who satisfy the monetary requirements in § 60.2‑612(A)(1) (applicable to unemployment claims), which, as of January 1, 2026, means the employee has earned at least $3,000 in the two highest‑earning quarters of their base period.

The leave is available for:

• Caring for a child during the first year after birth, adoption, or placement;
• Serious medical condition of the employee or a close family member;
• Care for a covered military family member;
• Responding to a qualifying exigency because of the employee’s or family member’s order to active duty; or
• To obtain safety services for the employee or a family member.

Covered individuals may receive up to 12 weeks of benefits per year, payable on the first calendar day of the benefit year for which they are eligible, except that paid leave for safety services is capped at four weeks. Weekly benefits are 80 percent of the individual’s average weekly wages, as defined by statute. The weekly benefit must be at least $100 per week unless the individual earns less than $100 per week, then the benefit should cover the full weekly wages. Payments are capped at the average weekly wage in Virginia, which, as noted above, is set yearly by DOLI.

The benefits for this paid leave are to be funded by a mix of employer and employee contributions, generally split 50/50. For employers with 10 or more employees, the employer can agree to cover more than 50 percent of the cost of the paid leave.

Conclusion

With so much happening in Virginia, it is imperative that employers review their policies now to ensure they are compliant as of July 1, 2026. If you have questions about any of these laws and their impact on your business, please reach out to a member of Spilman’s Labor and Employment Team.