This year’s General Assembly session saw the passage of several major employment laws in the Commonwealth, many of which will go into effect on July 1, 2026. Read on for more information about the new laws Virginia employers need to know before July 1.
Wage/Salary Ranges and Inquiries
House Bill 636 and Senate Bill 215 create a new pay transparency law for Virginia employers. Effective July 1, every private sector employer in the Commonwealth is required “to disclose in each public and internal posting for each job, promotion, transfer, or other employment opportunity the wage, salary, or wage or salary range for the position.” Wage or salary ranges are further required to be set “in good faith. The new law affords employers a right to cure deficiencies related to a wage or salary posting—if an employer corrects a posting within 15 days of receiving written notice of their noncompliance with the law, no action can be brought against the employer.
That same legislation further prohibits employers from asking applicants about their previous earnings. An applicant may voluntarily disclose their wage or salary history, but an employer is permitted to use this information only to support a wage or salary higher than the initial offer of compensation.
Violations of the new law may be enforced through an action brought by the Attorney General, or through action brought by an aggrieved prospective employee. Employers are subject to civil penalties of up to $1,000 for initial violations, and up to $5,000 for subsequent violations.
Non-Compete Law Changing, Again
Three bills passed into law this year that affect Virginia law regarding the use of covenants not to compete. Senate Bill 170 provides that non-compete agreements entered into after July 1, 2026, may only be enforced if an employer provides an employee severance benefits or other monetary payment to the employee, unless such employee is discharged for cause. The updated law further requires that such benefits or other payment be disclosed upon execution of the agreement.
Meanwhile, Senate Bill 128 and House Bill 627 prohibit non-compete agreements for healthcare professionals, defined to mean any person licensed, registered, or certified by the Board of Medicine, Nursing, Counseling, Optometry, Psychology, or Social Work. Although this law will prohibit non-compete agreements for professionals in the healthcare industry, it explicitly protects the use of nondisclosure agreements and other contracts with provisions for repayment of recruitment-related costs.
These changes build on Virginia’s existing statute prohibiting the enforcement of non-compete agreements with low-wage employees, as defined, which may be enforced through a civil action with penalties up to $10,000 per violation.
Volunteer Emergency Response Employee Protections
Senate Bill 100 prohibits employers from discharging, disciplining, penalizing, or otherwise taking retaliatory action against an employee solely because the employee fails to report to work due to service as an emergency responder. The new law provides that these protections are extended provided the employee provides certain notice and/or documentation to the employer.
Employers are not required to pay an employee for time missed due to service as a volunteer emergency responder, however an employee may use paid sick leave or other paid leave if accrued or otherwise entitled to.
Lower Thresholds for Small Business Exemptions
Two separate laws going into effect on July 1 amend existing law regarding exemptions for small businesses.
First, Senate Bill 637 makes several changes to the Virginia Human Rights Act (VHRA). Most importantly for Virginia businesses, the definition of “employer” under the VHRA makes the law applicable in all cases to employers of five or more employees; previously the law applied in all cases only to employers of 15 or more employees. The legislation also provides that complaints alleging an unlawful discriminatory practice may be filed within two years; previously the law required complaints to be filed within 300 days.
Separately, House Bill 176 and Senate Bill 149 reduce the threshold for employer participation in the Commonwealth’s state-facilitated IRA savings program from employers of 25 or more to employers of five or more. More information on the program can be found at www.retirepathva.com.
Wage Violations and Worker Misclassification Enforcement
House Bill 238 makes several major changes to existing law regarding penalties to employers for wage theft, minimum wage violations, overtime wage violations, prevailing wage violations, and worker misclassification. The law includes a definition of wages that explicitly includes traditional wages and salaries, as well as commissions, tips, bonuses, and damages available due to misclassification of an employee. Under the new system, each of the listed violations will be enforced in a similar manner, and penalties for all types of violations will be awarded consistent with existing law regarding nonpayment of wages.
Employees alleging any of the violations described above may bring an action individually or jointly against an employer, and upon prevailing are entitled to recover the wages owed, liquidated damages in the same amount, together with interest, and attorney fees and costs. Should a court find the violation was done knowingly, treble damages are to be awarded.
Minimum Wage to Increase in 2027 & 2028
Employers should also begin to prepare for legislation with a delayed effective date, most notably increases to Virginia’s hourly minimum wage. With the enactment of House Bill 1 and Senate Bill 1, Virginia’s current minimum wage of $12.77 per hour is codified in law and increases in 2027 and 2028 are prescribed. On January 1, 2027, Virginia’s minimum wage will increase to $13.75 per hour, to be followed in 2028 by an increase to $15 per hour. Annually thereafter, Virginia’s minimum wage is to be indexed to inflation equivalent to increases in the Consumer Price Index (CPI).
New Paid Leave Mandates on The Horizon
Finally, Governor Spanberger signed legislation requiring employers to provide paid sick leave, as well as legislation establishing a mandatory paid family and medical leave program in Virginia. House Bill 5 and Senate Bill 199 create requirements for employers to provide one hour of paid sick leave for every 30 hours worked and will be phased in based on employer size beginning July 1, 2027.
House Bill 1207 and Senate Bill 2, meanwhile, require the Virginia Employment Commission to establish and administer a paid family and medical leave (PFML) insurance program by April 1, 2028. The program will be funded by mandatory contributions from employers of more than 10 employees and all employees, with the contribution amount to be determined by October 1, 2027. Contributions will be collected by April 1, 2028, and claims will be paid by December 1, 2028. The Virginia Employment Commission (VEC) has issued a Notice of Intended Regulatory Action (NOIRA) for the PFML program with public comment to be accepted between June 15, 2026 and July 15, 2026. Employers are also invited to sign up for the VEC’s PFML mailing list here.
In addition to PFML regulations, the Virginia Chamber anticipates other regulatory actions affecting Virginia employers to unfold in the coming months. We will monitor these issues and engage with regulatory bodies on behalf of Virginia’s business community. In the meantime, we encourage Virginia businesses to review the legislation described above carefully and in consultation with a qualified attorney.
