Virginia Non-Compete Law and the Low-Wage Employee Ban

Under Virginia’s non-compete law for low-wage employees, your employer cannot enforce a non-compete against you if your average weekly earnings fall below $1,507.01 in 2026, which works out to roughly $78,364 a year.¹ The same ban also protects overtime-eligible workers, interns and trainees, and lower-paid independent contractors regardless of what they earn. A non-compete signed by a covered worker is void, and the employer can be sued and fined up to $10,000 per violation.

Who the Ban Protects

Virginia Code § 40.1-28.7:8 uses the phrase “low-wage employee,” but the category is wider than the name suggests. You’re covered if any one of these applies to you:

Your average weekly earnings over the 52 weeks before your job ended were less than Virginia’s average weekly wage. For 2026, that number is $1,507.01.¹
You’re entitled to overtime pay under the federal Fair Labor Standards Act for hours over 40 in a workweek. If you’re non-exempt, you’re covered no matter what you earn.²
You’re an intern, student, apprentice, or trainee — paid or unpaid — working to gain experience in a trade or occupation.²
You’re an independent contractor earning an hourly rate below Virginia’s statewide median hourly wage for all occupations, as reported by the Bureau of Labor Statistics for the prior year.²

The overtime-eligible category is the one most people miss. It reaches many workers earning well above the weekly dollar threshold, because most non-exempt employees qualify. If your employer has to pay you time-and-a-half for overtime, a non-compete against you is unenforceable under this statute.

The Commission Carve-Out

There is one exclusion. The statute does not protect employees whose earnings come entirely or predominantly from sales commissions, incentives, or bonuses.² If that describes your pay, the low-wage ban doesn’t reach you even if your total falls below the weekly number. Any non-compete you signed would be judged under Virginia’s general common law standards instead.

How Your Earnings Are Calculated

For workers relying on the weekly-wage threshold rather than one of the other categories, the math is simple. Take your total earnings during the 52 weeks right before your employment ended and divide by 52. If you worked fewer than 52 weeks, divide by the number of weeks you were actually paid.² Earnings include everything: hourly wages, salary, bonuses, and commissions all count.

The threshold resets every year based on wage data from the Virginia Department of Workforce Development and Advancement, so the cutoff moves with the state economy. The 2026 figure is $1,507.01 per week.¹

What the Ban Actually Prohibits

The statute defines a covenant not to compete as any agreement that restricts your ability to compete with your former employer after your employment ends. That covers agreements blocking you from working for a competitor and agreements blocking you from starting your own business in the same field.² The label on the agreement doesn’t matter; what matters is whether it functions as a non-compete.

The ban reaches agreements signed at hire, mid-employment, and at termination. No employer may enter into, enforce, or even threaten to enforce a non-compete against a covered worker. That last piece is important. A cease-and-desist letter or a verbal warning about “your non-compete” violates the statute even if the employer never files suit.

What the Ban Doesn’t Reach

Two kinds of restrictive agreements remain enforceable against low-wage employees, so a non-compete ban doesn’t necessarily mean every restriction in your paperwork is void.

Non-disclosure agreements still apply. Employers can require you to protect trade secrets and confidential business information you accessed on the job.² These agreements control what you can share, not where you can work.

Non-solicitation restrictions also survive. The statute’s own definition of a non-compete says it “shall not restrict an employee from providing a service to a customer or client of the employer if the employee does not initiate contact with or solicit the customer or client.”² In plain terms: your former employer can stop you from actively reaching out to poach their clients, but cannot stop you from serving those clients if they come to you on their own. A non-solicitation agreement drafted so broadly that it effectively locks you out of your field can still be challenged as a disguised non-compete, because courts look at the practical effect of the restriction rather than the label.

Enforcing Your Rights

If your employer enters into, enforces, or threatens to enforce a non-compete against you, you can sue in any Virginia court with jurisdiction. You have two years to file, but the clock doesn’t necessarily start when you signed. It runs from whichever of these four dates is latest:²

The date you signed the non-compete
The date you first learned about it (if it was buried in paperwork you didn’t realize you signed)
The date your employment ended
The date your employer took any step to enforce it

So if you signed a non-compete two years ago but your former employer only sent a cease-and-desist last month, the two-year window restarted from that letter.

What a Court Can Order

A court can void the agreement and order a range of relief: an injunction stopping enforcement, liquidated damages, lost wages, other compensatory damages, and reasonable attorney fees and costs.² The fee-shifting provision is what makes the private right of action realistic. Without it, hiring counsel would often cost more than the damages a low-wage worker could recover.

Protection from Retaliation

Your employer cannot fire, threaten, or retaliate against you for bringing a lawsuit under this section.³ That matters most if you’re still employed when you discover you signed an illegal non-compete and want to challenge it without walking away from your paycheck.

Civil Penalties

Separate from any private suit, the Commissioner of Labor and Industry can fine an employer up to $10,000 per violation.² Each agreement counts as a separate violation, so an employer that used the same illegal boilerplate across a workforce can rack up significant exposure.

If You Earn Above the Threshold

The statutory ban only reaches covered low-wage workers. If you earn more than the weekly cutoff, aren’t overtime-eligible, and don’t fit one of the other protected categories, your employer can require a non-compete. That doesn’t mean the agreement is automatically enforceable. Virginia courts apply a common law reasonableness test: the restriction must be narrowly drawn to protect a legitimate business interest, must not be unduly burdensome on your ability to earn a living, and must not violate public policy. The employer carries the burden on all three. A two-year statewide ban on working in your industry faces a much harder road than a six-month restriction limited to the specific accounts you managed.

One point catches employers off guard. Virginia courts generally do not rewrite overbroad non-competes to make them enforceable. Unlike states that trim unreasonable restrictions down through a “blue pencil” or reformation approach, Virginia has historically struck an unreasonable agreement in full rather than fix it.

Federal Non-Compete Rule

In 2024, the Federal Trade Commission tried to ban most non-competes nationwide. A federal district court blocked the rule in August 2024, and the FTC withdrew it in February 2026. There is no federal non-compete ban in effect. Even when it was proposed, the rule was not designed to override state laws with stronger worker protections, so Virginia’s statute would have continued to apply.⁴ Whether a non-compete can be enforced against you today turns entirely on state law.

1
Virginia Department of Labor and Industry. Notice of the Average Weekly Wage for 2026
2
Virginia Code Commission. Virginia Code 40.1-28.7:8 – Covenants Not to Compete Prohibited Exceptions Civil Penalty
3
Virginia Code Commission. Virginia Code 40.1-28.7:8 – Covenants Not to Compete Prohibited Exceptions Civil Penalty
4
Federal Trade Commission. Noncompete Rule