Part 1 of a 3-part series recapping this week’s BOSS Seminar, “Virginia Employment Law Update for Business Owners,” presented by Deb Collins of Yeng Collins Law, PLLC.
Two Virginia statutes affecting hiring practices and post-employment restrictions changed on July 1, 2026. This post summarizes the pay transparency and salary history provisions, along with the expanded non-compete rules, and outlines the compliance steps businesses should consider.
Context for the Changes
Deb Collins framed her presentation around a scenario relevant to many workplaces: an employee asks coworkers how much they earn, then requests a raise based on what they learn. Whether an employer can take action against that employee depends on a body of law that has been building since 2020 and expanded again this year. Understanding the current rules requires looking at both the pay transparency statute and the separate wage-discussion protections that preceded it.
Pay Transparency and Salary History Provisions
Under Va. Code § 40.1-28.7:12, employers are subject to the following requirements:
- Job postings, including postings for promotions and internal transfers, must include a “good faith” wage or salary range, for both internal and external audiences.
- Employers may not ask applicants or current employees about their wage or salary history.
- Salary history, even if known, may not be used as a factor in hiring or compensation decisions.
- Employers may not take retaliatory action against applicants or employees who decline to disclose salary history or who ask what a position pays.
This law builds on a 2020 statute, Va. Code § 40.1-28.7:9, which restricts employer responses to employees discussing their own or a coworker’s compensation. That earlier law includes an exception for employees whose job functions give them access to compensation information; those employees can face consequences for disclosing pay data to others who don’t otherwise have access to it, unless the disclosure occurs in response to a formal complaint, as part of an investigation or proceeding, or to satisfy a legal duty. The 2020 law carried a civil penalty of $100 per violation, payable to the state’s Literary Fund. Separately, the National Labor Relations Act also applies to private employers with at least two employees and provides additional protections in this area.
Defining a “Good Faith” Wage Range
The statute does not define “good faith” precisely, which gives employers latitude but also introduces some ambiguity. A range can reflect variation based on experience, education, credentials, and other qualifications. At the same time, the breadth of a posted range factors into whether an employer is found to have acted in good faith. A range such as $45,000 to $90,000 for a single role would likely draw scrutiny for being too broad.
Employers can determine an appropriate range by referencing:
- Existing, applicable pay scales.
- Previously established salary ranges for the position.
- The actual wage or salary of the person currently in the role.
- The budgeted amount allocated for the position.
One operational consideration raised in the seminar: once internal postings include pay ranges, employees reviewing those postings may notice that other roles carry higher ranges than their own. Employers may want to prepare an explanation for how ranges are set and why comparable positions can differ in pay.
Enforcement Mechanisms
The Office of the Attorney General has authority to investigate potential violations and pursue civil actions. Penalties are structured as follows:
- Up to $1,000 for a first violation.
- Up to $5,000 for each subsequent violation.
Separately, current and prospective employees can file a private lawsuit within one year of an alleged violation, seeking actual damages along with other legal or equitable remedies. When the alleged violation is a failure to disclose a pay range, the law includes a notice-and-cure provision: the employee must first give the employer written notice, and the employer then has 15 business days to remedy the issue. If the employer corrects the omission within that window, a lawsuit on that particular basis is precluded.
Expanded Non-Compete Restrictions
Virginia law already prohibited non-compete agreements for two categories of workers: “low-wage earners,” currently defined as employees earning $78,364.52 per year or less, and any non-exempt employee subject to overtime pay. Workers who fall into either category also cannot be bound by non-solicitation agreements covering employees or customers, if those agreements go beyond simply restricting the employee’s own solicitation activity.
New provisions under Va. Code § 40.1-28.7:8 apply to non-compete agreements executed, renewed, or amended on or after July 1, 2026, and add two further limitations:
- A non-compete becomes unenforceable if the employee is terminated without cause, unless the employer pays severance or another monetary payment. The amount of that payment must be disclosed to the employee at the time the non-compete is originally signed.
- Non-compete agreements are now prohibited for “health care professionals,” a category defined broadly to include any individual licensed, registered, or certified by the Boards of Medicine, Nursing, Counseling, Optometry, Psychology, or Social Work.
These changes are interpreted by related case law, including Sentry Force Sec., LLC v. Barrera, decided by the Virginia Court of Appeals in January 2026, which held that a non-compete is defined to include certain types of non-solicitation provisions as well.
Compliance Considerations
Businesses that haven’t reviewed job postings, offer letters, or restrictive covenant templates since July 1 may want to do so as part of routine document maintenance. Non-compete agreements drafted going forward should account for a disclosed severance figure if they are intended to remain enforceable following a no-cause termination. Employers with staff in licensed health care roles should confirm whether existing non-competes covering those positions remain valid under the new definition.
Yeng Collins Law indicated that a more detailed session focused specifically on the current state of Virginia non-compete law is planned for October, which may be a useful follow-up for businesses that rely heavily on restrictive covenants as part of their employment agreements.