Virginia Employment Law Changes 2026: Employer Guide

Effective July 1, 2026 · Published August 27, 2026
By Francisco E. Mundaca, Managing Partner, The Mundaca Law Firm, LLC

Virginia employers are operating under a substantially different employment-law landscape in 2026. A series of legislative changes has expanded employee protections, increased compliance obligations, and, in certain circumstances, created potential personal exposure for the individuals making employment decisions.

Many of these changes took effect July 1, 2026, and some are particularly significant for small and midsize businesses that may not previously have been subject to certain Virginia employment laws.

For employers, the message is straightforward: policies, employment agreements, hiring practices, and wage-and-hour procedures should be reviewed now.

Virginia Human Rights Act Now Covers More Employers

One of the most consequential changes involves the Virginia Human Rights Act (“VHRA”).

The threshold for coverage has been reduced from 15 employees to five employees, provided the employer has five or more employees for at least 20 calendar weeks.

This significantly expands the universe of Virginia businesses subject to state discrimination protections.

The period for employees to file discrimination complaints with the Virginia Office of Civil Rights has also increased from 300 days to two years.

For employers, the longer limitations period makes documentation increasingly important. Performance concerns, disciplinary actions, accommodation discussions, investigations, and the reasoning supporting termination decisions should be appropriately documented and retained.

Virginia Further Restricts Non-Compete Agreements

Virginia has also imposed additional restrictions on non-compete agreements.

For agreements entered into, amended, or renewed on or after July 1, 2026, employers generally cannot enforce a non-compete against an employee who is terminated without cause unless the agreement disclosed that the employee would receive severance benefits or another monetary payment associated with the termination.

Virginia has also prohibited non-compete agreements for several categories of licensed healthcare professionals, subject to limited exceptions.

Employers using restrictive covenants should therefore review their existing templates before issuing new agreements or modifying existing ones. Restrictive covenants can also intersect with separation disputes, as discussed in our overview of how non-compete agreements can affect wrongful termination claims. Employers evaluating their agreements may also wish to review our work as non-compete agreement attorneys.

Pay Transparency Is Now a Compliance Issue

Virginia employers must also adjust their recruiting practices.

Job postings for Virginia positions, as well as remote positions available to Virginia residents, must disclose a good-faith wage or salary range.

Employers are also restricted from requesting an applicant’s salary history or relying upon salary history when determining compensation.

These requirements make seemingly routine recruiting practices a potential source of liability. Employers should review job-posting templates, applications, recruiter instructions, and interview practices to ensure compliance. These obligations can be less obvious for companies hiring across state lines, an issue we examine for remote workers living in Virginia but working for out-of-state employers.

Managers May Face Personal Liability for Wage Violations

Changes to Virginia’s wage-payment laws have expanded the definition of an employer to potentially include individuals acting in the employer’s interest.

That means certain managers, supervisors, owners, and other decision-makers involved in compensation decisions may face individual exposure in wage disputes.

This development makes wage-and-hour training particularly important. Employers should ensure that individuals responsible for payroll and employment decisions understand issues including employee classification, overtime, deductions, and final wage payments.

RetirePath Virginia Now Reaches Smaller Employers

Virginia has also expanded its state-facilitated retirement program.

The employee threshold for mandatory participation in RetirePath Virginia has decreased from 25 employees to five employees, with part-time employees included when determining coverage.

Covered employers generally must either maintain a qualifying retirement plan or facilitate participation in RetirePath.

Smaller Virginia businesses that previously fell outside the program should determine whether they are now required to participate.

Virginia’s Minimum Wage Continues to Increase

Virginia’s minimum wage increased to $12.77 per hour on January 1, 2026, as published by the Virginia Department of Labor and Industry.

Additional increases are scheduled, including $13.75 in 2027 and $15.00 in 2028, followed by inflation-based adjustments beginning in 2029.

Employers should account for these increases when preparing compensation structures, payroll budgets, and future hiring plans.

What Should Virginia Employers Do Now?

The significance of these changes extends beyond simply updating an employee handbook.

Virginia employers should consider conducting a broader employment-law compliance review that includes:

• Equal employment opportunity and anti-discrimination policies
• Personnel documentation and record-retention practices
• Employment and restrictive covenant agreements
• Job advertisements and recruiting procedures
• Wage-and-hour classifications and payroll practices
• Manager and supervisor training
• Retirement-plan compliance

For smaller businesses in particular, practices that may have been legally sufficient only a year ago may no longer reflect Virginia law.

A Note From Our Managing Partner

Francisco E. Mundaca, Managing Partner of The Mundaca Law Firm, LLC, explains:

“Virginia’s 2026 employment-law changes are significant because they do more than create new technical requirements. They expand who is covered, extend the period in which claims can be brought, and in some circumstances expose the individuals making employment decisions to personal liability. Employers should not wait until a complaint, demand letter, or lawsuit arrives to determine whether their policies are compliant. The far less expensive approach is to identify and correct those risks before they become disputes.”

Frequently Asked Questions

Reviewing Your Virginia Employment Practices

The Mundaca Law Firm counsels employers and employees on employment-law compliance, workplace disputes, employment agreements, wage-and-hour matters, discrimination and retaliation claims, and employment litigation. Learn more about our employment law services for businesses operating in Virginia.

Businesses with employees in Virginia should consider reviewing their employment practices and agreements in light of these changes. To discuss a compliance review for your organization, contact our office to schedule a consultation.

---

This publication is provided for general informational purposes only and does not constitute legal advice. The application of employment laws depends upon the particular facts and circumstances involved. Businesses and individuals should consult counsel regarding their specific circumstances.