2025 Virginia Labor & Employment Year End Review

In November 2025, Virginia elected the state's first female Governor, Democrat Abigail Spanberger. Both Chambers of the General Assembly now have a Democratic majority. With Democratic control of both the executive and legislative branches, the General Assembly has introduced a broad array of expanded employment protections, including a minimum wage increase, paid sick leave for all employees, a paid family and medical leave program, and expanded overtime rights. There is also a proposal to restrict covenants not to compete.

House Bill (HB) 1 and Senate Bill (SB) 1 propose incremental minimum wage increases from the current minimum wage of $12.77 to $13.75 effective January 1, 2027, and to $15.00 effective January 1, 2028.

In Groundworks Operations, LLC v. Campbell, 923 S.E.2d 919 (Va. 2025), the Virginia Supreme Court held that Virginia's wage theft statute, Code § 40.1-29, does not cover commissions. The court reasoned that the plain language of the statute specifically lists wages and salaries, but not commissions. A proposed bill, HB1355, would overrule that ruling and would redefine “wages” to include all remuneration including salaries, commissions, bonuses, tips, back pay, dismissal pay, and severance pay. HB1355 has been referred to the Labor and Commerce Committee, and its passage is uncertain.

HB5 is another proposed bill. This bill would expand paid sick leave – which now only covers home health workers – to apply to all employees of private employers and state and local governments. Under the proposal, an employee would accrue one hour of paid sick leave for every 30 hours worked. Employers who fail to comply are subject to civil penalties and to civil actions brought by employees for double the amount of sick leave and actual damages. In addition, SB2 would create a paid family and medical leave insurance program administered by the Virginia Employment Commission. Benefits would not begin until January 1, 2029. Funding for the program would be provided through premiums assessed to employers beginning April 1, 2028. The benefit would be 80 percent of the employee's weekly wage, and the duration is to be capped at 12 weeks.

Proposed bill SB170 provides that covenants not to compete are not enforceable if an employer does not provide severance benefits, unless the employee is discharged for cause. Under the bill, employers would have to provide severance to enforce a non-compete.

Finally, proposed bill HB1164 would prohibit prospective employers from seeking wage or salary history of prospective employees. This would further complicate matters for employers operating in multiple states and seeking to comply with varying laws and regulations.

The General Assembly will adjourn in early to mid-March and will reconvene in mid-April to consider the Governor's vetoes and any amendments. Employers should monitor developments closely, as the proposed legislation will impose extensive new requirements and present significant potential fines and penalties, and increase the stakes for employee-initiated litigation.

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