Virginia HR Compliance Guide for Employers

Virginia occupies a middle position in the American employment law landscape. It is an at-will, right-to-work state with no local payroll taxes and a flat-ish income tax. But starting in 2020, when Democrats won control of both legislative chambers for the first time in 26 years, Virginia enacted a series of sweeping employment reforms that significantly changed the compliance picture. The Virginia Values Act added sexual orientation, gender identity, and marital status to anti-discrimination law. New whistleblower protections reached the private sector. A non-compete ban for low-wage workers was created and then substantially expanded in 2025.

For employers relocating from the South or Midwest, Virginia's post-2020 landscape may feel more protective than expected. For employers from California or New York, Virginia still looks relatively straightforward. The compliance complexity sits mainly in three areas: the multi-tiered VHRA threshold system, the expanding non-compete restrictions, and the cross-border obligations for Northern Virginia employers with staff working in Washington DC. FirstHR was built to help small businesses navigate exactly this kind of layered compliance without a dedicated HR team.

Virginia Employment Law at a Glance

Virginia's employment law rests on common-law at-will doctrine established in Bowman v. State Bank of Keysville (229 Va. 534, 1985). There is no statute codifying at-will employment; it is a judge-made rule. Note: Va. Code section 40.1-28.7:1 is sometimes incorrectly cited as the at-will statute. It actually prohibits requiring genetic testing as a condition of employment. Three exceptions override at-will termination: the public policy exception (employees cannot be fired for refusing to violate law or for exercising statutory rights), the implied contract exception when handbooks create reasonable expectations of continued employment, and statutory anti-retaliation protections under laws like VHRA and the private sector whistleblower statute.

Virginia has been a right-to-work state since 1947 under Va. Code sections 40.1-58 through 40.1-69. Union membership cannot be required as a condition of employment. Virginia operates under the Dillon Rule, which prohibits local governments from exercising powers not explicitly granted by the General Assembly. This means no Virginia city or county can set a higher local minimum wage, mandate paid sick leave for private employers, or create other employment benefit requirements beyond state law. The practical effect: one set of rules statewide, no city-by-city compliance tracking (with the important exception of employers with staff physically working in Washington DC).

Employment Law Fundamentals

Worker Classification Under Va. Code Section 40.1-28.7:7

Since July 1, 2020, Virginia presumes a worker is an employee when services are performed for remuneration. The burden of proof to establish independent contractor status falls on the employer using the IRS three-factor control test. A single misclassification complaint can trigger simultaneous investigation by the Virginia Department of Taxation, the Virginia Employment Commission, and the Virginia Workers Compensation Commission. Penalties under Va. Code section 58.1-1900 are $1,000 for a first violation, $2,500 for a second, and $5,000 for a third or subsequent violation per misclassified worker, plus back taxes for up to 5 years and potential debarment from state contracts. For a complete framework on properly classifying and onboarding contractors, see the contractor onboarding guide.

Virginia Values Act: The 2020 Landmark Reform

Before July 1, 2020, the Virginia Human Rights Act was a narrow law with limited enforcement tools. The Virginia Values Act (HB 1429/SB 868) transformed it into one of the more comprehensive state anti-discrimination laws in the country. The changes: sexual orientation, gender identity, marital status, and veteran status were added as protected classes; the scope expanded from termination-only to all terms and conditions of employment; the 12-month backpay cap was removed; punitive damages were permitted (up to the Virginia $350,000 cap); and a private right of action was created allowing employees to sue directly in state court without exhausting administrative remedies first. The Attorney General was granted authority to bring enforcement actions. For context on how Virginia's reforms compare to other states, see the New York HR compliance guide.

No State WARN Act

Virginia has no mini-WARN Act. Only the federal WARN Act applies, requiring 60 days advance notice for plant closings or mass layoffs at employers with 100 or more full-time employees. For businesses in the 5 to 50 employee range, federal WARN is unlikely to apply. For the complete separation process including documentation and IT steps, see the employee exit process guide.

Hiring and Onboarding in Virginia

Background Checks and the Clean Slate Law

Virginia has no statewide ban-the-box for private employers. Va. Code section 15.2-1505.3 (effective July 1, 2020) applies only to state and local government employers. Private employers may ask about criminal history on applications. One important limit: Va. Code section 19.2-389.3 prohibits asking applicants about arrests or convictions for simple marijuana possession. Alexandria, Arlington, and Virginia Beach have adopted ban-the-box ordinances for municipal hiring only.

The Virginia Clean Slate Law (Va. Code section 19.2-392.5) takes effect July 1, 2026. It provides for automatic sealing of certain criminal records including first-offense misdemeanor convictions after a waiting period. Once sealed, the record cannot be used in employment decisions. If your background check vendor does not update its compliance procedures by July 2026, you could receive sealed record information that you are legally prohibited from considering.

Drug Testing, Pay Transparency, and Salary History

Virginia has no state statute restricting employer drug testing beyond standard FCRA requirements. Va. Code section 40.1-27.4 prohibits adverse action based solely on an employee's use of medical cannabis oil under a physician's written certification. Exceptions apply to employees working under the influence, safety-sensitive positions, and federal contractors. There are no restrictions on cannabis testing equivalent to California's or Washington's rules.

As of March 2026, Virginia has no pay transparency requirement and no salary history ban for private employers. Va. Code section 40.1-28.7:9 prohibits retaliation against employees for discussing their wages with coworkers, but does not require salary disclosure in job postings. SB 215 passed both chambers of the General Assembly approximately March 26, 2026 and was awaiting Governor Spanberger's signature. If signed, it would require salary ranges in job postings for employers with 25 or more employees and prohibit asking applicants about salary history, with penalties of $1,000 to $4,000 per violation. Monitor doli.virginia.gov for the signed version and effective date before updating your posting practices.

Wages, Overtime, and Pay Rules

Virginia Minimum Wage: The CPI-U Path

The 2020 legislation set a path to $15 per hour by 2026, but included a reenactment clause requiring the General Assembly to affirmatively reapprove the increases beyond $12.00. Governor Youngkin vetoed the reenactment in 2024, triggering the CPI-U fallback. Rates now adjust each January based on the prior year's Consumer Price Index for Urban Consumers (CPI-U). There is no small business exemption and no youth subminimum wage exception except for a training wage of 75% of the Virginia minimum during the first 90 days of on-the-job training. The tipped minimum cash wage under federal FLSA ($2.13/hr) applies but total compensation including tips must meet the Virginia minimum in every workweek. For payroll setup including first-paycheck compliance, see the tax forms for new employees guide.

Virginia Overtime Wage Act: State Enforcement of Federal Standards

VOWA (Va. Code section 40.1-29.2) was enacted in 2021 as a standalone overtime law but was substantially rewritten in July 2022. The current version creates a state-court enforcement mechanism for FLSA overtime violations rather than establishing independent Virginia overtime rules. All definitions, exemptions, and calculations come from the FLSA. There is no separate Virginia daily overtime requirement. The practical significance: Virginia workers can pursue FLSA overtime claims in state courts, and courts can award triple damages for knowing violations plus attorney fees and 8% annual interest. There is no employee headcount threshold.

Virginia Wage Payment Act: Pay Stubs, Frequency, and Final Pay

The Virginia Wage Payment Act (VWPA, Va. Code section 40.1-29) sets the core wage payment rules. Salaried employees must be paid at least once per month; hourly employees at least twice per month or every two weeks. Pay stubs are required at every payment and must include the employer's name and address, hours worked, pay rate, gross pay, and an itemized description of all deductions. Deductions beyond taxes require a written signed authorization from the employee.

Final paychecks are due on the next regular payday following separation, whether the departure is voluntary or involuntary (Va. Code section 40.1-29(A)). Penalties for late or non-payment: unpaid wages plus equal liquidated damages plus 8% annual interest. For a knowing violation: triple damages plus attorney fees. Intentional non-payment of $10,000 or more is a Class 6 felony. The statute of limitations for wage claims is 3 years. For a complete separation process workflow, see the offboarding guide.

Virginia has an equal pay statute (Va. Code section 40.1-28.6, enacted 1974) but it only covers sex-based pay differences and explicitly does not apply to FLSA-covered employers, which is the large majority of employers. In practice, employees rely on the federal Equal Pay Act and Title VII for pay equity claims. SB 215 (pending) would significantly strengthen this if signed.

Virginia has no meal or rest break requirements for employees 16 years of age or older. Minors under 16 must receive a 30-minute break after 5 consecutive hours of work. The Virginia Pregnant Workers Fairness Act requires reasonable breaks for nursing employees through 1 year postpartum.

Leave and Time Off

Virginia mandates very little leave for private employers. The organ and bone marrow donation leave (Va. Code sections 40.1-33.7 through 40.1-33.12, since July 2023) is one of the less-known requirements: employers with 50 or more employees must provide up to 60 unpaid working days per year for organ donation and up to 30 days for bone marrow donation, with job and health insurance protection. The employee must have 12 months of tenure and 1,250 hours worked. For leave policy integration in your onboarding documentation, see the employee onboarding plan guide.

The crime victim leave statute (Va. Code section 40.1-28.7:2) allows employees who are victims of crime (including domestic violence) to take reasonable unpaid time off to attend court proceedings related to the crime. This applies to all employers with no size threshold and provides anti-retaliation protection. No specific duration is mandated. Virginia has no voting leave law and no bereavement leave mandate. For comparisons with states that have robust paid leave programs, see the Washington HR compliance guide (PFML and WA Cares) and the New Jersey HR compliance guide (TDI, FLI, and NJFLA).

Anti-Discrimination: VHRA and the Virginia Values Act

The Virginia Human Rights Act (Va. Code sections 2.2-3900 through 2.2-3948) uses a tiered coverage model unique among state anti-discrimination laws. Understanding which tier applies to your business determines both the scope of obligations and the remedies available to employees.

The complete list of protected classes under VHRA as of 2025: race (including hair texture and protective hairstyles under the CROWN Act), color, religion, ethnic or national origin (ethnic origin added as a standalone class July 1, 2024), sex (including pregnancy and related conditions), age (40 and over), marital status, sexual orientation, gender identity, disability, military status and veterans. Pregnancy is covered under both VHRA and the separate Virginia Pregnant Workers Fairness Act (Va. Code section 2.2-3909).

Discrimination complaints go to the Office of Civil Rights (OCR) within the Attorney General's Office at oag.state.va.us/citizen-resources/civil-rights, not to DOLI. The filing deadline is 300 days from the last discriminatory act. After 180 days, employees may request a right-to-sue letter and then have 90 days to file in state court. Filing with the EEOC simultaneously is permitted under a worksharing agreement. Available remedies after the Virginia Values Act: reinstatement, back pay without a 12-month cap, compensatory damages, punitive damages up to $350,000, and attorney fees. The Attorney General may also bring enforcement actions. For VHRA-compliant policy language for your handbook, see the employee handbook guide.

Virginia Pregnant Workers Fairness Act

The PWFA (Va. Code section 2.2-3909, effective July 1, 2020) requires employers with 5 or more employees to provide reasonable accommodations for employees who are pregnant, have given birth, or have related medical conditions, including lactation through one year postpartum. Per se accommodations that must be provided absent undue hardship include: more frequent rest or bathroom breaks, modified food and drink policies, seating, limits on lifting, temporary transfer to less strenuous work, light duty, a modified work schedule, and a private non-bathroom space for expressing breast milk. Unlike federal accommodation analysis, Virginia's PWFA does not require an employer to first find that an employee is disabled before providing accommodation.

Virginia was the 4th state and first Southern state to enact the CROWN Act (SB 50/HB 1514, Va. Code section 2.2-3901(D), effective July 1, 2020), which clarifies that racial discrimination under VHRA includes discrimination based on hair texture, hair type, and protective hairstyles such as braids, locks, twists, and cornrows. Sexual harassment training is not mandated for private employers in Virginia. The Sexual Harassment Training Act (section 30-129.4) applies only to the legislative branch. For anti-discrimination policy templates, see the sample employee handbook.

The private sector whistleblower statute (Va. Code section 40.1-27.3, effective July 1, 2020) protects employees who report violations of state or federal law, participate in investigations, or refuse to participate in criminal activity. All employers are covered with no size threshold. Filing deadline: 1 year. Remedy: direct civil action for reinstatement and back pay. Employees may also be covered by the VOSH whistleblower statute (Va. Code sections 40.1-51.2:1 and 40.1-51.2:2) for safety-related complaints, with a 60-day filing deadline with DOLI.

Workplace Safety: VOSH and Workers Compensation

Virginia operates an approved OSHA State Plan (VOSH) under Va. Code section 40.1-49.3, receiving final federal approval November 30, 1988. VOSH covers both private sector and state/local government workers, which is broader than federal OSHA. DOLI's Division of Occupational Safety and Health administers the program. Virginia generally adopts federal OSHA standards verbatim but maintains several state-specific standards that are stricter: reverse signal operation requirements, confined space regulations for telecommunications, tree trimming standards, and compliance with manufacturer's instructions for equipment. The COVID-19 Emergency Temporary Standard was terminated March 23, 2022 with no residual requirements.

Incident reporting deadlines: fatalities within 8 hours; in-patient hospitalizations, amputations, or loss of eye within 24 hours. VOSH penalties are adjusted annually:

Workers compensation (Va. Code section 65.2-101 et seq.) is mandatory for employers with more than 2 employees (3 or more). Part-time, seasonal, and temporary workers count. Corporate officers count toward the threshold but may elect exemption. Virginia is a competitive-market state: coverage comes from private insurers, not a state fund. Benefits: 66 and two-thirds percent of average weekly wage for temporary total disability, for up to 500 weeks (permanent total disability is covered for life). Employer must file the First Report of Injury with the Virginia Workers Compensation Commission within 10 days of learning of an injury requiring medical treatment. Employee must notify the employer within 30 days and file a claim within 2 years. Penalties for non-coverage: up to $250 per day, maximum $50,000, plus personal liability for all medical costs and benefits; criminal penalties of $1,000 plus up to 6 months imprisonment. All covered employers must display the VWC Form 1 poster prominently. Details at workcomp.virginia.gov.

Payroll and Tax Compliance

Virginia Income Tax: Graduated Brackets

Virginia's standard deduction is $8,750 for single filers and $17,500 for married filing jointly in 2025. The Virginia Earned Income Tax Credit increased to 20% of the federal EITC starting with the 2025 tax year. Virginia has reciprocity agreements with DC, Maryland, West Virginia, Kentucky, and Pennsylvania: employees who live in one of these states but work in Virginia (or vice versa) only owe income tax in their state of residence, not in both. Employers must honor withholding exemption certificates from employees claiming residency in a reciprocity state. Register for Virginia income tax withholding at tax.virginia.gov. Key forms: VA-4 (employee withholding certificate), VA-6 (annual withholding reconciliation due January 31), W-2 filed electronically with VA-6. For a complete list of all hire-related tax forms, see the tax forms guide.

Unemployment Insurance and Full Payroll Summary

Virginia's UI taxable wage base is $8,000, one of the lowest in the country, which limits the exposure for most employers. New employer rate: 2.5%. Experienced employer rates range from 0.1% to 6.2% based on claims history. A 0.05% administrative fee was added in 2025. Register with the Virginia Employment Commission using the online VACES portal at vec.virginia.gov/employers. Quarterly wage reports (VECUI-20) are due the last day of the month following each quarter. Virginia has no local income or payroll taxes due to the Dillon Rule, which is a significant simplification for multi-location employers compared to states like Pennsylvania or Ohio.

Employee Privacy and Data Protection

Virginia is a one-party consent state for recording communications (Va. Code section 19.2-62). One party to a conversation may record without notifying the other party. Violation is a felony punishable by 1 to 5 years imprisonment. The civil remedy is $100 per day or $1,000, whichever is greater. Employers may record conversations they participate in but cannot secretly record communications between employees they are not party to. A written monitoring policy in your handbook is recommended best practice.

The Virginia Consumer Data Protection Act (VCDPA, Va. Code section 59.1-571 et seq., effective January 1, 2023) made Virginia the second state after California to enact a comprehensive data privacy law. Critically, it contains a permanent exclusion for employee data in the employment context, unlike California's CCPA which had only a temporary exemption. VCDPA applies to businesses that control or process personal data of 100,000 or more Virginia consumers, or derive over 50% of gross revenue from selling personal data. Enforcement is by the AG only, with a $7,500 maximum penalty per violation and a 30-day cure period. A 2025 amendment expanded protections for reproductive and sexual health information to individuals rather than consumers, which may affect how Virginia employers handle certain health-related employee data.

Data breach notification (Va. Code section 18.2-186.6): notification to affected individuals must occur without unreasonable delay. There is no specific day deadline. The AG must be notified for all breaches affecting Virginia residents (not just those over 1,000 as sometimes stated). If 1,000 or more persons are affected, additional notification to credit reporting agencies is required and notification timing and distribution details must be shared with the AG. Civil penalty: up to $150,000 per breach. The social media password protection law (Va. Code section 40.1-28.7:5, since July 1, 2015) prohibits requiring employees or applicants to provide login credentials for personal social media accounts or adding the employer as a contact. Exceptions apply to formal investigations of workplace misconduct. For personnel file access: Va. Code section 8.01-413.1(B) (since July 1, 2019) gives current and former employees the right to request copies of their employment records showing dates of employment, position, job description, wages, and work-related injuries. Employers must respond within 30 days.

Termination, Non-Competes, and Separation

Virginia Non-Compete Law: Expanded July 2025

Virginia's non-compete ban (Va. Code section 40.1-28.7:8) originally applied only to "low-wage employees" defined by an earnings threshold. SB 1218, signed by Governor Youngkin on March 24, 2025 and effective July 1, 2025, substantially expanded the restriction in two ways. First, it now covers all employees who are non-exempt under the FLSA (entitled to overtime pay), regardless of their income level. Second, it still covers employees whose average weekly earnings fall below the Virginia average of approximately $76,081 per year in 2025. The restriction also covers interns, students, and apprentices. The exception is workers whose compensation is derived primarily from sales commissions, incentives, or performance bonuses.

Remedies for violating the non-compete ban: $10,000 civil penalty per violation (enforced by DOLI), plus the employee's lost compensation, liquidated damages, and attorney fees. Employers must post the DOLI-approved non-compete covenant notice in the workplace. SB 170 (2026), awaiting Governor's signature, would additionally void any non-compete when an employee is laid off without receiving severance pay. For offer letter templates that account for Virginia's non-compete restrictions, see the offer letter template. For a comparison of non-compete law across states, see the California HR compliance guide (near-complete ban) and the North Carolina HR compliance guide (strict blue pencil enforcement).

Virginia Mini-COBRA

Virginia has a mini-COBRA law (Va. Code section 38.2-3541) covering employers with 2 to 19 employees who offer qualifying group health insurance. This fills the gap for small employers where federal COBRA (which requires 20 or more employees) does not apply. Employees and covered dependents may continue coverage for up to 12 months following a qualifying event. The employer must notify affected individuals within 14 days of the qualifying event; the employee has 31 days to elect coverage. Premiums may be up to 102% of the full group rate.

Employee References

Va. Code section 8.01-46.1 provides qualified privilege protection for employers providing job references. An employer who provides a good-faith reference about a current or former employee's qualifications, job performance, conduct, or reasons for separation is protected from defamation liability. The privilege is overcome only by clear and convincing evidence that the employer provided knowingly false information. This is a stronger reference protection than most states offer, reducing the legal risk of providing substantive employment references.

Employee Handbook Requirements

Virginia has two legally required handbook content items that many employers overlook: the written pregnancy accommodations policy and the written disability accommodations policy. Both must be in the handbook, not just posted. Both must be provided to employees at hire and again within 10 days of learning about a pregnancy or disability. Failing to have these policies in writing creates direct liability under VHRA and the PWFA, not just a technical compliance gap. For a complete handbook building guide, see the employee handbook guide. For a ready-to-use starting point, see the sample employee handbook.

The at-will disclaimer requires careful attention in Virginia given the implied contract exception. If your handbook describes a performance improvement process, lists specific reasons for termination, or uses language suggesting employment will continue absent specific cause, a court may find an implied contract. The disclaimer should be conspicuous, appear on the first page, explicitly state the handbook is not a contract, and reserve the right to modify policies without notice. Include a signed acknowledgment page.

Northern Virginia and Local Compliance

The Dillon Rule prevents Virginia localities from enacting employment laws stricter than state law. No Virginia city or county can set a local minimum wage, require paid sick leave for private employers, or create employee benefit mandates beyond state standards. This simplifies compliance for employers operating across multiple Virginia locations.

However, Northern Virginia employers face a distinct compliance layer: employees who physically work in Washington DC are covered by DC employment law, not Virginia law. DC's minimum wage is $17.50 per hour in 2025. DC requires paid sick leave of up to 7 days for larger employers. DC's Universal Paid Leave program requires employer contributions of 0.26% of covered wages. DC's Fair Criminal Record Screening Act (ban-the-box) applies to employers with 11 or more employees in DC. These DC obligations apply based on where the work is physically performed, not where the employer is headquartered.

Within Virginia, Fairfax County enforces a living wage of $17.10 per hour for county employees (FY 2025) and a prevailing wage ordinance for construction contracts over $250,000. Arlington County has a similar living wage for county contractors. These apply only to organizations receiving county contracts, not to all private employers in those jurisdictions. Ban-the-box ordinances in Alexandria, Arlington, and Virginia Beach apply only to municipal hiring. For compliance in Maryland (common for DC-area employers with cross-state operations), see the Maryland HR compliance guide.

Required Workplace Postings

Virginia requires more state postings than most business-friendly states, reflecting the post-2020 legislative expansion. Download all required Virginia posters free at doli.virginia.gov/resources/required-posters. The VHRA poster was updated in 2025 to include "ethnic origin" as a protected class. The non-compete notice was updated in July 2025 to reflect SB 1218's expansion. Electronic posting may supplement but does not replace physical workplace display.

Virginia vs. Federal vs. California

Virginia's position is notably different from both extremes. It offers fewer mandates than California on paid leave and breaks, but more worker protections than the baseline federal law on non-competes, anti-discrimination coverage (5+ employees for wrongful discharge), and whistleblower rights. The most operationally significant comparison: California bans non-competes nearly completely; Virginia bans them for all FLSA non-exempt workers since 2025; and federal law has no such prohibition. For employers comparing Southern states, see the Georgia HR compliance guide and the North Carolina HR compliance guide.

Key Legislative Changes 2020-2026

The most operationally significant near-term change is the July 1, 2025 non-compete expansion (SB 1218) which now covers all FLSA non-exempt workers regardless of income. If you have existing non-compete agreements with hourly workers or salaried non-exempt employees, those agreements are now void. The Clean Slate Law takes effect July 1, 2026 and will require updates to background check procedures. If SB 215 (pay transparency) is signed, employers with 25 or more employees will need to include salary ranges in all job postings before the effective date. For a complete onboarding compliance checklist incorporating all Virginia requirements, see the onboarding compliance guide.

Frequently Asked Questions