Virginia Employment Laws | The Banks Law Firm

Written By: Theresa McCarthy

Effective July 1, 2026, Virginia enacted one of the most significant packages of employment law reforms in recent years. If your business has employees in Virginia, these changes may affect your workplace. While several of these new laws will not take effect immediately, many require employers to begin planning now to ensure policies, handbooks, payroll practices, hiring processes, records retention schedules, and employment agreements are compliant. Below is an overview of some of the most significant developments.

Expanded Virginia Human Rights Act

Virginia has significantly expanded the time employees have to file discrimination complaints with the Virginia Office of Civil Rights. Effective July 1, 2026, Virginia employees now have two years (instead of the previous 300 days) from the alleged discriminatory act to file a complaint. This extended limitations period increases employers’ potential exposure to discrimination claims and underscores the importance of maintaining thorough documentation regarding hiring, disciplinary actions, performance management, accommodations, and terminations.

Statewide Paid Sick Leave Is Coming

Virginia has adopted a statewide paid sick leave law that applies regardless of employer size, although implementation is phased in. Key provisions include:

Employers with more than 50 employees must begin complying with the new requirements on July 1, 2027; employers with 25-49 employees must begin complying on July 1, 2028; and employers with 1-24 employees must begin complying on July 1, 2029.
Employees accrue one hour of paid sick leave for every 30 hours worked, up to 40 hours annually.
Unused leave may generally be carried over from year to year.
Leave may be used for an employee’s own illness or medical care, as well as to care for a broad range of family members.
The law also permits leave for employees or their family members who are victims of domestic violence or sexual assault.
Employers must comply with specific notice, recordkeeping, and confidentiality requirements concerning medical information and information related to domestic or sexual violence.
Employees may pursue a private lawsuit or file a complaint with the Virginia Commissioner of Labor and Industry. Courts may award double damages for unlawfully denied leave, along with other available remedies.

Employers should begin reviewing existing paid leave policies to determine whether revisions will be necessary.

Virginia Creates Paid Family and Medical Leave Program

Virginia has established a statewide paid family and medical leave insurance program. Eligible employees may receive up to 12 weeks of paid leave at 80% of their average weekly wages, subject to statutory caps. The program generally applies to employees in Virginia who have earned sufficient wages to qualify for unemployment insurance benefits, regardless of the size of the employer. Unlike traditional employer-funded leave, this program will be financed through payroll contributions shared between employers and employees and administered by the Virginia Employment Commission. The implementation timeline is as follows:

October 1, 2027: Contribution rates established.
April 1, 2028: Payroll contributions begin.
December 1, 2028: Eligible employees may begin receiving benefits.

The program is intended to run concurrently with other applicable leave laws, including the federal Family and Medical Leave Act (FMLA), if applicable. Although benefits will not begin until 2028, employers should monitor regulatory guidance as implementation details continue to develop.

New Pay Transparency Requirements

Virginia has joined the growing number of states requiring greater transparency in hiring and compensation practices. Employers must now:

Include a good-faith salary or wage range in both internal and external job postings.
Avoid asking applicants about current or prior compensation.
Refrain from retaliating against applicants who decline to disclose salary history or who request compensation information.

Many employers will need to revise recruiting practices, employment applications, interview procedures, and job posting templates.

New Restrictions on Non-Compete Agreements

Virginia has limited the enforceability of employee non-compete agreements. Under the new law, a non-compete generally cannot be enforced against an employee who is terminated without cause unless the agreement provides for severance pay or other compensation. Additionally, non-compete agreements entered into with medical practitioners after July 1, 2026 are generally unenforceable. These changes make it an appropriate time for employers to review existing restrictive covenant agreements, including non-compete, non-solicitation, and confidentiality provisions.

Increased Wage and Hour Enforcement Risks

Virginia has strengthened its wage payment laws, increasing the financial consequences for employers that violate wage and hour requirements. The amendments include:

Mandatory awards of attorneys’ fees in many successful wage claims.
A stronger presumption in favor of liquidated damages.
Increased litigation risk involving unpaid overtime, employee misclassification, improper deductions, commissions, bonuses, incentive compensation, final wages, and unpaid training time.
A requirement that employers retain payroll records for at least three years.

Employers should consider conducting proactive wage and hour audits to identify and correct potential compliance issues before they result in litigation.

Minimum Wage Increases Continue

Virginia’s minimum wage will continue to increase over the next several years, as follows:

$13.75 per hour beginning January 1, 2027.
$15.00 per hour beginning January 1, 2028.
Beginning January 1, 2029, the minimum wage will be adjusted annually based on changes in the Consumer Price Index.

Employers should account for these increases when planning compensation budgets and evaluating exempt/non-exempt classifications.

What Employers Should Do Now

Although several of these laws have future effective dates, employers should begin preparing well in advance. Recommended next steps include:

Review employee handbooks and leave policies.
Update hiring and recruiting practices to comply with pay transparency requirements.
Audit wage and hour practices, including employee classifications and payroll procedures.
Review non-compete and other restrictive covenant agreements.
Ensure payroll record retention practices meet the new requirements.
Budget for upcoming paid leave obligations and minimum wage increases.

For employers with multistate operations, it is particularly important to determine whether Virginia-specific policies or handbook supplements will be necessary.

Virginia’s Sweeping New Employment Laws Took Effect on July 1, 2026: What Employers Need to Know