Start of Session

Jan 8, 2025

While every session is a little different, the 2025 General Assembly session is off to a more complicated start than usual. The City of Richmond has been dealing with water issues since the beginning of the week when they experienced a power outage from the winter storm that hit Sunday and Monday. Subsequently, various pieces of the City water system failed, leaving most everyone across the City without water and/or under a boil water advisory until at least Friday. Most of the traditional pre-Session receptions and Caucus events on Monday and Tuesday were canceled.

The lack of water throughout the city has meant a shutdown of all state office buildings, including the Capitol and the General Assembly Building. The GAB also experienced a failure of its fire suppression system on Tuesday. As a result, the 2025 General Assembly Session gaveled in at noon today, as constitutionally required, and then recessed until Monday morning.

Bill filing deadlines and budget amendment deadlines are being pushed until early next week, although we still expect to see a large number of bills filed today and on the system in the near future. We will be sending weekly reports/bill tracking reports as normal on Friday, even though we may not see some bills on the system until next week. As of this morning, there are 959 pieces of legislation that have been introduced for the 2025 Session. However, that number will quickly grow as bills continue to hit the system.

The Governor’s State of the Commonwealth address will occur at 10:00 a.m. in the House of Delegates Chamber on Monday. After that, we expect the business of the 2025 Session to begin in earnest with subcommittee and full committee meetings throughout the week. With the delay of the first week, there is a real possibility that the General Assembly will have to meet on weekends as we get closer to crossover.

Special elections were held to fill two Senate seats and one House seat in the Virginia General Assembly. We are waiting for certification by the Virginia Department of Elections, but at this time, results show Republican Luther Cifers receiving 58.73% of the votes for Senate District 10 and Democrat Kannan Srinivasan receiving 61.25% of the votes for Senate District 32. Democrat JJ Singh received 61.59% of the votes for the House of Delegates 26th District. This will maintain the status quo in both houses.

Virginia Retail Federation and The Two Capitols Consulting team will continue to keep you up-to-date about important actions and news that arise across the Commonwealth. Should you have any questions or concerns, please do not hesitate to reach out.

The Big Picture

Most of these changes take effect July 1, 2026, with additional requirements phasing in through 2029. Across the board, the trend is clear: Virginia is expanding employee protections, broadening enforcement mechanisms, and increasing the financial consequences for employers who don’t keep up.

Here’s what you need to know.

Minimum Wage Increases

Virginia’s minimum wage is on a multi-year upward trajectory:

January 1, 2027: $13.75/hour (up from $12.77)
January 1, 2028: $15.00/hour
2029 and beyond: Adjusted annually by regulation based on a cost-of-living index

The increase applies to whichever is higher — state or federal minimum wage — and affects overtime calculations. For tipped employees, the state minimum wage applies, while tip credits remain tied to the federal minimum wage.

What to do now: Update payroll systems ahead of each increase and review how wage changes flow through to overtime calculations and commission structures.

Pay Transparency & Salary History Ban

Effective July 1, 2026

All job postings — internal and external — must include a salary or wage range set in “good faith.” There is no statutory definition of what range width qualifies, but narrower bands are generally recommended for compliance. Asking candidates about salary history is prohibited. The only exception: if a candidate voluntarily discloses their salary, an employer may use that information solely to offer a higher salary than originally intended — not to anchor compensation downward.

Jackson Lewis recommends treating salary history questions the same way you would treat questions about age, race, or family status: off limits in any interview or application context.

Penalties include civil fines up to $1,000 for a first posting violation and up to $5,000 for subsequent violations, plus a private right of action for aggrieved applicants.

What to do now: Audit every job posting template, remove salary history questions from applications and interview guides, and establish a process for setting and documenting compensation ranges before you post.

Noncompete Restrictions

Effective July 1, 2026 (for new agreements only)

Virginia’s noncompete law tightens further this year. Employers may not enter into noncompete agreements with:

Employees earning less than approximately $72,000–$76,000 annually, or
Employees entitled to overtime pay under the FLSA, or
Healthcare workers holding active professional licenses

For employees who remain eligible for noncompetes, any new agreement must now include either a termination-for-cause provision or a specified severance amount in the event of termination without cause. Neither “cause” nor a minimum severance threshold is defined in the statute — courts will interpret these standards over time.

The penalty for requiring or threatening to enforce an invalid noncompete is $10,000 per violation, even if the mistake was made in good faith.

This law applies only to agreements entered into on or after July 1, 2026. Existing agreements remain governed by prior law.

What to do now: Audit all noncompete agreements before rolling out new ones. Do not present noncompetes to any low-wage or overtime-eligible employee after July 1. For eligible employees, decide now whether you will build in a cause requirement or a severance provision — and specify any severance amount in the agreement itself.

Anti-Discrimination Expansion — Virginia Human Rights Act

One of the most significant changes in the session is the expansion of the Virginia Human Rights Act (VHRA):

Coverage threshold lowered: The VHRA now applies to employers with 5 or more employees (previously 15).
Filing deadline doubled: Employees now have 2 years to file a VHRA claim — up from 300 days.
No damage caps: Unlike federal Title VII claims, VHRA claims carry no cap on damages.
Jury trials in state court: VHRA cases are heard in state court, before Virginia juries, with no damage ceiling.

The practical impact is significant. Jackson Lewis presenters noted that the extended filing window and unlimited damages make VHRA claims far more attractive than federal claims — and expect most employment discrimination matters going forward to be filed under state law rather than federally.

Adding to the urgency: AI-assisted litigation is rising sharply, with a reported 49% increase in pro se filings using AI-generated legal documents. More employees are pursuing claims without attorneys, making it easier and cheaper than ever to initiate a case.

What to do now: Update employee handbooks and anti-discrimination policies to reflect the new 5-employee threshold. Establish a formal complaint reporting process with a named contact — not simply “any manager.” Provide anti-discrimination training to all supervisors; Jackson Lewis recommended EEOC training videos as a baseline.

Paid Sick Leave

Phased rollout beginning July 1, 2027

Virginia will require mandatory paid sick leave for all employees — full-time, part-time, and seasonal — on a phased schedule:

July 1, 2027: Employers with 50 or more employees
January 1, 2028: Employers with 25 or more employees
January 1, 2029: All employers with 1 or more employees

Accrual rate: 1 hour of paid sick leave for every 30 hours worked, capped at 40 hours per year. Employers may choose to front-load 40 hours at the start of the year rather than track accrual. Leave is use-it-or-lose-it within the calendar year.

If you already have a PTO policy, it may satisfy this requirement — but only if at least 40 hours are explicitly designated for sick leave use. Employers may require reasonable notice and documentation, but cannot impose overly rigid restrictions on how leave is used.

One open question from the session: whether paid sick leave will be treated as “wages” subject to mandatory payout at separation. That remains unsettled and will likely be shaped by future court decisions.

What to do now: Even if your compliance deadline isn’t until 2028 or 2029, begin building leave tracking infrastructure now. Review your existing PTO policy language to determine whether it already satisfies the designation requirement.

Paid Family & Medical Leave

Payroll deductions begin April 1, 2028 | Benefits begin December 1, 2028

Virginia is establishing a state-administered paid family and medical leave insurance program, making it the 14th state (plus D.C.) to do so. Key details:

Benefits are paid at 80% of average weekly wages, for up to 12 weeks
Funded through payroll deductions beginning April 1, 2028
Employers may elect to satisfy the requirement through private insurance rather than contributing to the state fund
Covers all qualifying reasons under FMLA (personal health, family care, bonding with a new child), plus military-related leave situations
Administered by the Virginia Employment Commission

Regulations governing premium rates and private insurance requirements are still being developed. The VEC is expected to publish premium rates by October 2027.

What to do now: Alert your payroll and HR teams. Begin evaluating whether the state fund or private insurance will be the better option for your workforce. Plan for system updates and employee communications well ahead of the April 2028 deduction start date.

Heat Illness Prevention

Regulations due by May 1, 2028

Virginia’s Safety & Health Codes Board is required to develop and adopt workplace heat illness prevention regulations covering both indoor and outdoor work environments. Specific requirements — water, shade, rest periods, acclimatization protocols, written prevention plans — will be established through that rulemaking process. In the meantime, federal OSHA’s General Duty Clause applies to heat hazards and is actively enforced.

What to do now: Conduct a heat exposure assessment for your worksites, particularly for outdoor operations or non-climate-controlled indoor environments. Don’t wait for the final regulation to build a basic heat illness prevention protocol.

Key Takeaways for Business Owners

The compliance window is short for several of these changes. A few priorities from the session:

Before July 1, 2026: Revise all job postings to include salary ranges; remove salary history questions from applications and interview processes; review noncompete agreements; and update anti-discrimination policies and complaint reporting procedures.

By January 1, 2027: Update payroll systems for the $13.75 minimum wage increase.

By 2027–2028: Build paid sick leave accrual systems; designate sick leave within any existing PTO policy; prepare payroll systems for the PFML deductions beginning April 2028; and elect a funding method for family leave.

Ongoing: Conduct wage audits that include bonuses, commissions, and tips; train managers on anti-discrimination obligations; document salary decisions and interview discussions; and consult employment counsel when drafting or updating noncompete agreements.

Stay Informed

As these laws take effect and regulations are finalized, we will continue to keep members informed of important updates and developments.

InUnison, Retail Alliance, and Virginia Retail Federation members are welcome to reach out to us directly with questions. If you’re not yet a member and would like access to resources like this — including ongoing legislative guidance — contact Robert Thomas at rthomas@inunison.org to learn more about membership.

This post is provided for general informational purposes and does not constitute legal advice. For guidance specific to your business, consult qualified employment counsel. Jackson Lewis P.C. attorneys are available to assist.