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April 17, 2025
Since 2020, Virginia has prohibited its employers from entering into, enforcing, or threatening to enforce non-competition agreements (non-competes) with employees[1] earning low wages. Virginia currently defines “low-wage employees” as employees whose average weekly earnings[2] are less than the average weekly wage in Virginia – a number that the Virginia Department of Workforce Development and Advancement (Department) determines annually. In 2025, the average weekly wage is $1,463.10.
In March, Virginia Governor Glenn Youngkin signed Senate Bill 1218, which will become effective for contracts, covenants, or agreements entered into or renewed after July 1, 2025. The law expands the definition of low-wage earners to include all non-exempt employees, regardless of their average weekly earnings. Non-exempt employees are employees who are entitled to overtime compensation under the Fair Labor Standards Act for hours worked in excess of 40 in any workweek.
Though the definition of low-wage employees in the law will change, many other provisions of Virginia’s non-compete ban remain unchanged. For example, any Virginia employer who enters into, enforces, or threatens to enforce a non-compete with a low-wage employee still may be subject to a lawsuit for damages, attorney’s fees, and liquidated damages, as well as civil monetary penalties assessed by the Labor Commissioner. In addition, Virginia employers still must post a copy of the law or a summary approved by the Department in the same location where other employee notices required by state or federal law are posted.
Virginia Employers: Audit your non-competes, as well as your related policies and practices, to ensure compliance with the expanded definition of low-wage employees. Be sure to update your workplace notices to reflect the change in the law. And understand that, while the law restricts non-competes with low-wage employees, you still may utilize nondisclosure agreements to protect your confidential and proprietary information, or your trade secrets.
The author of this article, Patricia Tsipras, is a member of the Bar of Pennsylvania. This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice in Pennsylvania, Virginia, or any other jurisdiction, nor does it establish an attorney-client relationship with any reader of the article where one does not exist. Always consult an attorney with specific legal issues.
[1] Though we use “employee” in this article, Virginia’s non-compete ban also applies to interns, students, apprentices, and trainees. “Low wage employees” also include individuals who have independently contracted with another person to perform services independent of an employment relationship and who are compensated for such services at an hourly rate that is less than the median hourly wage in Virginia for all occupations as reported, for the preceding year, by the Bureau of Labor Statistics of the U.S. Department of Labor. “Low wage employees” do not include employees who earnings are derived, in whole or in predominant part, from sales commissions, incentives, or bonuses.
[2] You calculate an employee’s average weekly earnings by dividing the employee’s earnings during the period of 52 weeks immediately preceding the date of termination of employment by 52, or, if any employee worked fewer than 52 weeks, by the number of weeks that the employee was actually paid during the 52-week period.
