Final Versions of Significant Virginia Employment Legislation Set to Take Effect July 1, 2026

As Virginia’s legislative season nears its close, we look at the final versions of the employment laws that have recently been or are expected to be signed by the Governor.  We previously previewed significant employment legislation here, but a number of substantive recommendations by the Governor resulted in significant amendments to the legislation originally passed by the General Assembly. 

Overall, this session has brought a flurry of new laws, expanding obligations and risks for employers, reminiscent of 2020.  Those laws that have been approved by the Governor will have an effective date of July 1, 2026, requiring employers to review employment agreements and policies in advance of that date to ensure compliance.  In addition to the laws below, Virgina has passed a comprehensive paid family and medical leave law, and is expected to pass paid sick leave as well.  Stay tuned for further alerts detailing the key aspects and timeline for implementation of those paid leave laws.

Wage Transparency Requirements and Salary History Limitations. Virginia passed SB 215/HB 636, imposing new wage disclosure requirements and limiting the use of salary and wage history in employment decisions.  Specifically, employers are prohibited from (1) asking an applicant about their current or prior wages or salary; (2) relying on salary history when deciding whether to interview, hire, or promote an individual; (3) using salary history to determine starting pay unless the employee voluntarily discloses it; and (4) retaliating against or refusing to hire an applicant for declining to provide salary history or requesting a wage or salary range.  Additionally, if an applicant voluntarily discloses salary history, an employer may only rely on that information to justify paying the applicant more than the original offer.

Employers must also disclose the wage or salary range for a position in each public and internal job posting for new hires, promotions, transfers, or other employment opportunities.  These ranges must be set in “good faith” – determined by reference to one or more legitimate factors including an existing pay scale, a previously determined range for the role, the actual pay range for employees currently in comparable positions or the budgeted amount for the position.  Excessively broad ranges may be challenged as failing to meet this good faith requirement.

Actions alleging violations of this law may be brought by the Attorney General or by an aggrieved prospective employee.  Failure to comply with these obligations may subject employers to civil penalties up to $1,000 for the first violation and up to $5,000 for any subsequent violation.  Claims must be brought within one year of the alleged violation of the prospective employee’s rights. Successful claimants may recover actual damages and other legal or equitable relief the Court deems appropriate.

However, employers will be able to avoid these enforcement actions in certain circumstances through timely action.  Employers are entitled to an opportunity to cure alleged violations of (1) the failure to disclose a wage or salary range or (2) the alleged failure to set such a range in good faith.  Any person – not just a prospective employee – may provide written notice to the employer of non-compliance with these requirements.  After receipt of such notice, an employer has 15 days to cure any defects in its posting.  If timely corrections are made, the employer is not subject to enforcement measures or penalites for the alleged violation.  Notably, “notice” is deemed effective for the life of the posting and prospective employees seeking to sue employers for failing to properly disclose salary and wage ranges in job postings may rely on another individual’s written notice of a noncompliant job posting to satisfy the cure notice requirement when suing an employer for failing to post wage ranges.

Expansion of Liability under Virginia’s Wage Statutes:  The Governor has signed an amended version of HB 238, a comprehensive restructuring of the Commonwealth’s wage and hour, misclassification, prevailing wage, and overtime statutes. Under HB 238, the definition of “employer” is expanded across multiple statutes to include any person acting directly or indirectly in the interest of an employer, thereby aligning employer definitions across the minimum wage, wage payment, overtime, and misclassification laws. It also added a new definition of “wages” to include hourly wages, legally required prevailing wages, piece rate wages, day rates, salaries, overtime wages, commissions, tips, bonuses, and damages due to misclassification. HB 238 also amends Va. Code § 40.1-29 to require employers to keep paystubs for a minimum of 3 years.

At the same time, the law enhances remedies available to misclassified workers and minimum wage claimants by authorizing liquidated and treble damages, lengthening the statute of limitations to three years, and allowing collective action mechanisms, significantly increasing potential liability by combining expanded damages with longer look back periods and aggregated claims. It also grants the Labor Commissioner new authority to initiate enforcement actions without receiving a written complaint from an employee and to seek restitution, damages, and statutory penalties either through administrative proceedings or by referral to the Attorney General.

HB 238 also strengthens public works prevailing wage requirements by mandating on site posting of prevailing wage rates, six year retention of payroll and classification records, and sworn pay scale certifications by contractors. Perhaps most significantly for the construction industry, the law expands joint and several liability for general contractors by narrowing the availability of the “knew or should have known” defense and increasing the circumstances under which a general contractor may be held responsible for a subcontractor’s wage violations. Although a knowledge-based standard formally remains, the practical effect is broader exposure to wage liability on covered construction projects.

New Restrictive Covenant Prohibitions.  Governor Spanberger approved legislation (SB 170) preventing employers from enforcing restrictive covenants (e.g., non-competition agreements, customer non-solicitation agreements, employee non-solicitation agreements) against any employees that the employer discharged, unless the employer pays the employee “severance benefits or other monetary payment.” The law provides an exception if the employee is terminated “for cause” or if the employee resigns.

Employers must disclose such “severance benefits or other monetary payment” to the employee at the time of executing the restrictive covenant. These changes will only apply to restrictive covenants entered into, amended, or renewed on or after July 1, 2026; previously-executed agreements will be grandfathered in without these requirements. Virginia employers should review their existing restrictive covenant agreements and determine if any changes may be necessary and, if so, should evaluate whether to roll out new agreements prior to the July 1^steffective date of the revised statute.

The Virginia legislature passed one other restrictive covenant-related bill (HB 627 and SB 128) limiting to the use of restrictive covenants with “health care professionals,” i.e., “any person licensed, registered, or certified by the Board of Medicine, Nursing, Counseling, Optometry, Psychology, or Social Work.” As described in our prior alert, this bill would prohibit the use of most restrictive covenants with such health care professionals, with certain limited exceptions:

• Restrictive covenants with health care professionals when executed in connection with the sale of the health care business (or a division or subsidiary), provided that the restrictive covenant is reasonable in scope, duration, and geographic area;
• Restrictive covenants requiring repayment of (a) recruitment-related costs (relocation expenses, signing/retention bonuses, and other replacement costs), and (b) recruiting, education, or training expenses from departing health care professionals who were employed for fewer than five years;
• Patient non-solicitation covenants, prohibiting health care professionals from soliciting or attempting to solicit patients with whom the worker had “material contact” during employment for purposes of providing substantially similar products or treatment to those patients, provided that the non-solicitation covenant allows the worker to disclose to such patients (1) the worker’s continuing practice of medicine, (2) the worker’s new contact information, and (3) the patient’s right to choose a health care professional.

To date, Governor Spanberger has yet to sign the amended bill, although we expect her to do so shortly, as the legislature adopted a version mostly implementing her recommended changes to the prior bill. Assuming the Governor signs this bill, it would apply to any patient non-solicitation covenants entered into or renewed on or after July 1, 2026, meaning that bills executed before July 1st are grandfathered in under the more relaxed prior statutory scheme.

Minimum Wage Increases:  With the passage of HB 1 and SB 1, Virginia’s minimum wage will increase from $12.77 per hour in 2026, to $13.75 per hour in 2027, and to $15.00 per hour in 2028. Thereafter, minimum wage will increase annually based on increases to the consumer price index.

Voluntary Emergency Responder Protections Implemented:  Virginia will now prohibit an employer from discriminating or retaliating against an employee “solely” because the employee is absent from work due to responding to an emergency or during a state of emergency while acting in the capacity as a volunteer emergency responder.  As set forth in SB 100, “volunteer emergency responder” includes active members or a volunteer fire department of volunteer emergency medical services agency or unit.  Employers may require that an employee provide a certification of service upon returning to work.  Employers are not required to pay employees for time missed due to service as a volunteer emergency responder but must permit employees to use any accrued paid leave for those absences.  There is a limited exception to these protections for those deemed “essential employees” by statute or contract.  Employees may bring a private action within one year of any alleged violation to seek an injunction, reinstatement, or lost wages, reasonable attorney fees and costs. 

New Child Labor Requirements: Governor Spanberger also signed SB 10 and HB 275 updating Virginia’s child labor and apprenticeship law. Specifically, this law maintains the existing prohibition on individuals under 18 working in occupations deemed hazardous by Virginia’s Commissioner of Labor and Industry, but also prohibits working in occupations deemed hazardous by the U.S. Secretary of Labor. Additionally, the law imposes new requirements for employers hiring children 16 years or older in apprenticeship programs or other work-training programs relating to culinary arts or information technology.

Virginia Human Rights Act Changes Remain Unclear: Unlike the laws described above, two pieces of legislation that would result in notable changes to the Virginia Human Rights Act remain in flux.

The General Assembly passed a bill (HB 925) that would increase the statute of limitations for filing a charge of discrimination in employment under the Virginia Human Rights Act from 300 days to two years.  The Governor did not sign that version of the legislation and recommended that the time period for filing a charge only be increased to one year, marking a significant reduction in the proposal. 

The General Assembly also passed a bill (HB 1173/SB 258) to include menopause and perimenopause as protected categories under the Virginia Human Rights Act, prohibiting discrimination on those bases and requiring employers to make accommodations for these conditions.  However, the Governor did not approve that version of the bill and instead recommended that a study be conducted by January 1, 2028, evaluating various aspects of menopause and perimenopause in the workforce, including best practices for providing accommodations in an employment environment.

Neither of the Governor’s recommendations for these Virginia Human Rights Act bills were voted on by the General Assembly and thus the bills will be returned to the Governor in their original form for her signature or veto.

Employer Takeaways:  Employers should review their employment agreements, restrictive covenants, application materials and policies to ensure compliance before July 1, 2026, and verify that outdated templates are removed from circulation.   Employers should also ensure managers and human resources professionals are trained on these new laws, along with those requirements already in effect, as a preventative measure to avoid potential liability given the significant expansion of enforcement mechanisms and liability risks throughout these new employment laws.