Takeaways

• Effective 07.01.25, a new amendment to Virginia’s non-compete law expands the definition of “low-wage” employees to include employees classified as non-exempt under the FLSA.
• The new definition will not apply retroactively to existing agreements.
• Employers should audit their employee classifications and policies that contain non-compete provisions.

Related links

• Virginia Enacts Wage Theft, Non-Compete Laws Amidst Flurry of New Employee Protections
• SB1218, Covenants not to compete prohibited, low-wage employees, exceptions, civil penalty
• Notice of the Average Weekly Wage for 2025

Article

Virginia is the most recent state to tighten restrictions on employment non-compete agreements. Governor Glenn Youngkin signed a bill expanding the definition of low-wage employees under the state’s existing prohibition on covenants not to compete, Va. Code Ann. § 40.1-28.7:8. Effective July 1, 2025, the statute will prohibit employers from entering into non-compete agreements with employees classified as non-exempt under the Fair Labor Standards Act (FLSA).

Existing Law

As enacted in 2020, Va. Code Ann. § 40.1-28.7:8 broadly defined a “low-wage employee” as an employee whose average weekly earnings were less than $1,137 (or $59,124 a year), the average weekly wage of employees in the Commonwealth of Virginia.

On Dec. 10, 2024, the Virginia Department of Labor and Industry announced the 2025 average weekly wage for determining who is a “low-wage employee” is $1,463.10 (or...

Read Full Story: https://news.google.com/rss/articles/CBMitgFBVV95cUxOX203ZnB5NXlmM3hzejZfcVM4...