In previous blogs we have discussed the 2020 Virginia statute (§ 40.1-28.7:8. Covenants not to compete prohibited as to low-wage employees; civil penalty (virginia.gov)) that restricts the use of noncompete agreements. Employers who use noncompete agreements for the limited category of employees should review annually the updates to the average weekly wage.
As a reminder, the law provides that as of July 1, 2020, employers are prohibited from entering into, enforcing, or threatening to enforce a covenant not to compete with any “low-wage employee.” The law defines “low-wage employee” as one whose average weekly earnings are less than the average weekly wage of the Commonwealth, as determined annually by the Virginia Workers’ Compensation Commission. For 2022, that amount has been increased to $1,290 per week, as shown on the Virginia Department of Labor’s website at https://www.doli.virginia.gov/2022/01/01/notice-of-the-average-weekly-wage-for-2022/ . On an annualized basis, the compensation would be $67,080.
As an additional reminder, the statute contains a provision deals with independent contractors: “’Low-wage employee’ also includes an individual who has independently contracted with another person to perform services independent of an employment relationship and who is compensated for such services by such person at an hourly rate that is less than the median hourly wage for the Commonwealth for all occupations as reported, for the preceding year, by the Bureau of Labor Statistics of the U.S. Department of Labor.”
The most recent Virginia median hourly wage is $22.69. That amount does not appear to have been revised yet from the 2021 rate shown at Virginia - May 2021 OEWS State Occupational Employment and Wage Estimates (bls.gov).
Employers must post either a copy of the new law or a summary approved by the Virginia Department of Labor and Industry where other state and federal laws are required to be posted. A notice on the DOLI website which can be used as the poster also contains the average weekly wage information is found at the same link noted above: https://www.doli.virginia.gov/2022/01/01/notice-of-the-average-weekly-wage-for-2022/.
John Falcone and Luke Malloy handle employment law matters at PLDR Law. Feel free to contact us if you have questions about this matter.