Staff Recommendation: Virginia’s Proposed 2026 Employment Legislation (as of March 9, 2026)

Description

Virginia is poised to pass sweeping employment legislation this year. With parallel legislation moving through the Senate and the House in several key areas, we expect the following proposed bills to become law.

Right to Work

• Legislation aims to repeal Virginia’s long-standing right-to-work law, which currently prohibits employment agreements requiring union membership as a condition of employment.
• We are watching this closely. The bill to repeal right to work wasn’t brought to the Senate’s Commerce and Labor Committee for a full hearing.

Minimum Wage

• Legislation seeks to increase the current state hourly minimum wage of $12.77 per hour (that was effective January 1, 2026) to $13.75 per hour effective January 1, 2027, and to $15.00 per hour effective January 1, 2028.
• Effective January 1, 2029, and annually thereafter, the minimum wage rate would be adjusted to reflect increases in the consumer price index (CPI).

Paid Sick and Safe Leave

• Effective date will likely be July 1, 2027.
• Expands legal requirements that currently require one hour of paid sick leave for every 30 hours worked for home health workers to cover all employees of private employers and state and local governments.
• Employees will begin accruing sick leave at the time of and employers may elect to front load an employee’s annual sick and safe leave.
• Employers must permit employees to carry over at least 40 hours of accrued but unused sick and safe leave to the following year.
• Employers are not required to pay out accrued but unused sick and safe leave at termination.

Paid Family & Medical Leave Insurance Program

• A state-administered paid family and medical leave (PFML) insurance program. Covered employees receive payment from the state – not their employer.
• Funded by payroll premiums shared by both employers and employees. Employers may deduct up to 50% of the required contributions from employee pay. Contributions will begin in 2028, and benefits will become available starting in 2029. The employer contribution rate is expected to be fixed by October 1, 2027.
• Up to 12 weeks of paid leave in a benefit year can be used for an employee’s serious health condition, to care for a family member with a serious health condition, or to care for a new child.
• Paid leave benefits will equal to 80% of the 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.
• 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.

Wage Transparency

• Employers would be prohibited from seeking or relying on a prospective employee’s wage or salary history when making hiring or compensation decisions. Narrow exceptions permit employers to consider salary history only when an applicant voluntarily discloses it, after an initial offer has been made, or to support a higher salary than originally offered.
• Employers would be required to disclose wage or salary ranges in all public and internal job postings.  For claims related to posting requirements, applicants must first notify the employer and allow a 15-day cure period before filing suit.

Restrictions on Non-Compete Agreements

• Virginia currently prohibits employers from 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 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.”
• Employers would be prohibited from enforcing a non-compete against any employee who was discharged without a severance offer.

Prohibition Against “Stay or Pay” Contracts

• 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.
• As currently drafted, this bill does not address whether it would apply to already executed stay or pay contracts.

Artificial Intelligence in Employment Decisions

• Employers would be prohibited from deploying, using, or relying on automated decision systems that result in discrimination based on protected characteristics under the Virginia Human Rights Act.
• Employers would be responsible for an AI model’s decisions even when using a vendor’s services.
• Those relying on AI-assisted hiring or assessment tools may be required to conduct risk assessments, disclose AI use, and potentially provide appeal mechanisms for adverse decisions.

Workplace Violence Plan Requirements

• Employers with more than 100 employees would be required 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.

Prepare for what comes next. Virginia’s 2026 legislative session is scheduled to adjourn on March 14 and reconvene on April 22 to consider the Governor’s actions on bills and budget items. Employers should begin budgeting for potential increased labor costs, reviewing non-compete agreements and severance practices, auditing AI-assisted hiring tools, and evaluating leave policies for compliance with anticipated new requirements. Proactive monitoring and preparation will help employers ensure compliance, minimize risk, and maintain a competitive edge in this evolving regulatory environment.