Previewing Virginia’s 2026 Employment Legislation

Virginia is poised to pass sweeping employment legislation this year reminiscent of the wave of new laws enacted in 2020.  As we move into the back half of the legislative calendar, we preview the bills that have been passed by at least one chamber.  With parallel legislation moving through the Senate and the House in several key areas, and the anticipated support of the Governor for these measures, we expect the following new employment laws to be enacted by the end of the legislative session.

Paid Sick Leave

Virginia is expected to pass one of its two pending paid sick leave bills (HB5 and SB199), expanding the state’s paid sick leave requirement to all private employers starting in July 2027.  Virginia’s current paid sick leave requirements apply only to home healthcare workers and thus this legislation represents a significant expansion of paid sick leave in the state.  Although there are some differences in the two pending bills, the key elements largely overlap.

The law will require employers to provide one hour of paid sick leave for every 30 hours worked by an employee.  Employers who already offer paid time off are not required to provide additional paid sick leave if employees may use that paid time off for the same reasons and under the same conditions outlined in the law. Covered uses include illness, medical appointments and preventative care for the employee or employee’s family member and certain absences due to domestic violence, sexual assault, or stalking to obtain medical care or legal services for the employee or employee’s family member.

Employees will begin accruing sick leave at the time of hire (or on the effective date of the law) and employers may elect to front load an employee’s annual sick leave grant.  Employers must permit employees to carry over at least 40 hours of accrued but unused sick leave to the following year.  However, employers are not required to pay out accrued but unused sick leave at termination.

The law also includes prohibitions on retaliation for requesting or using sick leave, alleging a violation of the law or participating in an investigation, as well as a prohibition on interference with the use of paid sick leave. Employees may file a complaint with the Commissioner of Labor & Industry or may directly file a civil action in Court within two years of any alleged violation of the law.  Once enacted, the Commissioner will issue regulations to address in greater detail notice, posting and record keeping requirements, confidentiality of health information the employer receives regarding its employees or their family members, and additional enforcement measures. 

Paid Family & Medical Leave Insurance Program

After several attempts to pass similar legislation in recent years, it appears that paid family and medical leave will finally (eventually) be coming to Virginia.  Both the House and the Senate have passed legislation (SB2 and HB1207) that will establish a state-administered paid family and medical leave (PFML) insurance program with benefit payments expected to start in 2029.

Virginia’s PFML program will provide up to 12 weeks of paid leave in a benefit year for an employee’s serious health condition, to care for a family member with a serious health condition, to care for a new child, to obtain safety services, to care for a covered service member and for qualifying exigency leave.  Covered workers will receive paid leave benefits equal to 80% of their average weekly wage, subject to a cap of 100% of the statewide average weekly wage. 

Employees can receive paid family and medical leave benefits on an intermittent or reduced schedule.  Leaves for which employees receive family and medical leave benefits are job protected, meaning employees are entitled to be restored to the same or equivalent position at the conclusion of the leave and employers are required to maintain an employee’s health care benefits during the leave.  Any leave taken for which the employee receives family and medical leave benefits will run concurrently with any FMLA leave.

Virginia PFML will be funded by payroll premiums shared by both employers and employees.  Employers may deduct up to 50% of the required contributions from employee pay.  Although there is some difference in the implementation dates set forth in the respective bills, generally contributions will begin in 2028 and benefits will become available starting in January 2029.  The employer contribution rate is expected to be fixed by October 1, 2027.

An employer may require that paid family and medical leave benefit payments be made concurrently or otherwise coordinated with other payments or leave provided for under another employer policy or collective bargaining agreement.  Employers may also apply to the Virginia Employment Commission for approval to meet their obligations under the law through a private plan in lieu of participation in the state-administered system.

The law sets forth notice and posting requirements, prohibits both retaliation for exercising any right under the law and interference with any right or benefit provided for by the law, and provides a private right of action for alleged violations.

Wage Transparency and Salary History

The Virginia legislature advanced several changes concerning the use of salary and wage history in employment decisions and the disclosure of salary ranges in job postings for open positions.

The State Senate’s SB215 and its House counterpart HB636 establish new prohibitions on Virginia employers’ use of wage or salary history in hiring employees and negotiating their compensation. These prohibitions include:

1. Seeking the wage or salary history of a prospective employee;
2. Relying on the wage or salary history of a prospective employee in considering the employee for employment;
3. Relying on the wage or salary history of a prospective employee in determining the wages or salary of the prospective employee; and
4. Refusing to interview, hire, employ, promote, or otherwise retaliate against a prospective employee for not providing wage or salary history or requesting a wage or salary range.

An exception allows an employer’s consideration of wage and salary history in a prospective employee’s salary negotiations when the prospective employee voluntarily discloses the information, without prompting by the employer, but only after an initial offer of employment and compensation is made. Furthermore, the employer may only rely on this prior salary or wage history to support a salary higher than its initial offer. The employer is also entitled to confirm the salary history provided by the prospective employee by contacting the prior employer.

In addition to the above prohibitions on the use of wage or salary history in employment decisions for prospective employees, the bills also contain requirements for employers to disclose the wage or salary range in each public and internal job posting for new hires, promotions, transfers, or other employment opportunities. The bills require that these ranges be set in good faith and any analysis of an employer’s good faith in setting the range must include an analysis of the range’s breadth.

Unlike similar legislation in Maryland and the District of Columbia, Virginia’s wage and salary history bills establish a private right of action, including potential collective action, for prospective employees or current employees to bring claims against employers who fail to abide by the bills’ requirements.  However, before a prospective employee can bring suit alleging violations of the bills’ wage and salary range posting requirements, the prospective employee must first notify the employer of the violation, after which the employer has a 15-day period to cure the violation and avoid the suit.

Expansion of Liability under Virginia’s Wage Statutes

The Virginia General Assembly is moving forward with HB238, 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.  At the same time, the bill 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. It also grants the Labor Commissioner new authority to initiate enforcement actions without a written employee complaint and to recover wages, penalties, and attorney’s fees directly from employers.

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 bill expands joint‑and‑several liability for general contractors by removing the “knew or should have known” requirement as a condition to general contractor liability for its subcontractors’ wage violations, effectively eliminating the knowledge‑based defense. The bill also adds explicit cross‑references to misclassification and wage‑payment statutes, thereby broadening the penalties that can attach to violations and increasing general contractors’ exposure for wage‑related claims on construction projects.

Prohibition Against “Stay or Pay” Contracts

HB923 proposes a new prohibition against entering into, enforcing, or attempting to enforce so-called “stay or pay contracts” with employees. Stay or pay contracts are essentially contracts whereby an employer provides some monetary or non-monetary benefit to an employee, the cost of which the employee will have to repay if they separate from employment within a certain timeframe thereafter. HB 923 would ban all stay or pay contracts, with few exceptions, the most notable being contracts relating to certain tuition repayment agreements and contracts relating to “a discretionary or unearned monetary payment, including a financial bonus.”  The bill provides for a private right of action for enforcement or threatened enforcement of a stay or pay contract. It also provides for a two-year statute of limitations.  As currently drafted, this bill does not address whether it would apply to already-executed stay or pay contracts. However, given its prohibition against enforcing or threatening to enforce contracts, and the absence of a carve-out for contracts executed before its effective date, employers should tread carefully before attempting to enforce any stay or pay agreements, even those executed before this bill’s effective date.

New Restrictive Covenant Prohibitions

Virginia currently prohibits entering into or enforcing a post-employment “covenant not to compete” with “low-wage workers,” i.e., those earning less than $1,507.01 per week or any other non-exempt employee under the FLSA (irrespective of their earnings).  Two bills, HB627 and SB128, seek to now prohibit such restrictive covenants with any “health care professionals.” “Health care professionals” are defined as “any person licensed, registered, or certified by the Board of Medicine, Board of Nursing, Board of Optometry, Board of Psychology, or Board of Social Work.” There are a few key differences between the two pending bills:

• First, HB 627 only prohibits restrictive covenants with health care professionals making less than $500,000 annually. SB 128 applies to all health care professionals, regardless of their compensation.
• Second, SB 128 would allow 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.
• Third, SB 128 would allow employers of health care professionals to include provisions 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.
• Fourth, SB 128 would permit employers to execute patient non-solicitation covenants with health care professionals, prohibiting them 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.

In other restrictive covenant legislation, SB170 would prevent employers from enforcing restrictive covenants against any employees that the employer discharged, unless the employer pays the employee “severance benefits or other monetary payment.” The bill provides an exception if the employee is terminated “for cause” or if the employee voluntarily resigns. Such “severance benefits or other monetary payment” must be disclosed to the employee at the time of executing the restrictive covenant.

Workplace Violence Plan Requirements

If HB944 is enacted, it would create significant new workplace‑violence–prevention obligations for larger employers in Virginia while expanding the Commonwealth’s anti‑retaliation protections. The bill amends Virginia’s whistleblower statute to prohibit employers from retaliating against workers who make reports of workplace violence under an employer’s workplace violence policy. It also requires employers with more than 100 employees to develop, implement, and maintain a comprehensive workplace violence prevention program by January 1, 2027. This program must be customized to the employer’s specific operations, workspaces, and risk profile, and must clearly identify responsible personnel, reporting channels, incident‑response procedures, investigation protocols, emergency procedures—including responses to weapon‑related threats—employee training requirements, ongoing risk assessments, and hazard‑mitigation measures such as engineering or work‑practice controls.  In addition to policy development, HB 944 would impose recordkeeping and communication requirements for workplace violence incidents.

Other Legislative Updates

Other employment-related bills include new limitations on certain permissible categories of child labor (SB10), and a new requirement that most domestic workers (other than Medicaid-funded home healthcare workers and au pairs) be classified as employees (rather than independent contractors) and be paid overtime for hours worked over 40 in a workweek (SB28). Under HB1 and SB1, Virginia’s minimum wage, which is currently $12.77/hour, will also increase to $13.75/hour on January 1, 2027, and $15.00/hour on January 1, 2028, with continued increases being determined by the prior year’s average consumer price index.

To Be Continued…

We will continue to monitor these bills as they move through the General Assembly, and, potentially, to the Governor's desk, over the coming weeks.  Stay tuned for comprehensive updates on the final paid sick leave law, paid family and medical leave insurance program and more as legislation is finalized and enacted.