Virginia employers, prohibited to enforce non-compete agreements on low-wage employees

Posted by on 9/23/2020 to News

If you are an employee earning less than $1,137 per week or an average of $59,124 per year, then you should be aware by now about the recent update on the prohibition for Virginia employers to enforce a covenant not to compete with low-wage employees.

You can read the complete amended policy at Virginia’s Legislative Information System or by simply clicking this link: https://lis.virginia.gov/cgi-bin/legp604.exe?201+ful+SB480ER

The new law which only applies to low-wage employees took effect last July 1, 2020. It states that a non-compete agreement is a contract that “restrains, prohibits, or otherwise restricts an individual’s ability, following the termination of the individual’s employment, to compete with his former employer.”

While the statute defines a low-wage earner as any employee earning $1,137 per week, this rate may still be subject to change. The new law also exempts employees who are under the said bracket pay but receives commissions or incentives.

To protect the rights of employees who might bring a civil action to enforce his or her rights under this law, companies or employers are prohibited to retaliate. The Department of labor hopes that this curbs the practice of Virginia employers to require, enforce or threaten to enforce a non-compete agreement.

Employees who will be found violating the new law will face a substantial monetary liability of $10,000 for every violation. In an event that an employer tries to compel a non-compete to a low-wage employee, the said agreement will be deemed void and without warrant. 

The Department of Labor and Industry also expects the compliance of Virginia employers to put up posters of the new law in the same area where all labor posters are posted. 

For easy access, a copy of this required notice is included in the Virginia and Federal labor law poster, along with other recent updates based on new rulings for the state of Virginia, which you can purchase by simply going to https://www.compliancepostersofamerica.com.