Virginia Gov. Glenn Youngkin has signed into law legislation that amends the threshold compensation level of a “low-wage employee” with whom the commonwealth restricts employers from entering into agreements not to compete. Virginia currently prohibits employers from entering into, enforcing, or threatening to enforce noncompete agreements against “low-wage employees,” who were previously defined under the state’s noncompete statute as individuals who earn less than the commonwealth’s average weekly wage. In 2025, that amount is $1,463.10 per week (which equates to an annual salary of $76,081).
The new law amends the definition of “low-wage employee” to include employees who, regardless of their average weekly earnings, are entitled to overtime compensation under federal law for any hours worked in excess of 40 hours in any one workweek. In other words, this amendment now expands the definition of a “low-wage employee” to include those who are deemed “nonexempt” from the federal Fair Labor Standards Act. This new law will go into effect on July 1, 2025.
Employers in Virginia that use or are considering using noncompete agreements with their workforce should evaluate their existing agreements and assess whether employees now fall within the definition of a “low-wage employee.” Employers should also remain aware of the parameters of Virginia’s ban on noncompete law that have not changed, including that:
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