Virginia & Maryland Employers: What to Know for July 1, 2026, and Beyond
As we approach the July 1 legislative cycle, employers in Virginia and Maryland face significant HR and payroll changes that will impact hiring practices, compensation strategies, and compliance requirements.
Below is a practical summary of the most important developments—and what your organization should be doing now.
Virginia: Significant Changes to Pay Practices & Compliance
Virginia’s 2026 legislative session introduced sweeping reforms affecting pay transparency, wage enforcement, and compensation planning.
Pay Transparency & Hiring Requirements
(SB 215 and HB 636 Effective July 1, 2026)
- Salary/wage ranges must be included in all job postings.
- Employers cannot request or rely on salary history.
- Anti-retaliation protections apply to applicants.
What does this mean: Job postings must be aligned with actual compensation practices and payroll data. Failure to comply could lead to penalties or claims.
Virginia Minimum Wage Increases (HB1 Effective 2026–2028)
Virginia has approved a phased increase to $15/hour:
- $12.77/hour– effective January 1, 2026
- $13.75/hour– effective January 1, 2027
- $15.00/hour– effective January 1, 2028
- Automatic inflation-based increases begin in 2029.
What does this mean: Employers should begin multi-year budgeting now, as increases will lead to wage compression and higher payroll costs.
Expanded Wage Definitions & Enforcement (HB 238 Effective July 1, 2026)
- Virginia expands the definition of “wages” to cover hourly wages, salaries, overtime, tips, bonuses, commissions, piece rates, day rates, and prevailing wages.
- Increased ability for employees to recover damages and penalties.
What does this mean: Compensation structures (especially incentives and commissions) should be reviewed for compliance.
Non-Compete Restrictions (SB 170 and HB 627 For agreements entered into, renewed, or amended after July 1, 2026)
- Non-competes are unenforceable without severance if an employee is terminated without cause.
- Non-competes are prohibited for defined healthcare professionals.
What does this mean: Employers must update offer letters, contracts, and termination practices.
Forward Looking: Paid Leave Expansion (HB 5 and SB 199)
- Paid sick leave phases in beginning July 1, 2027, for employers with 50 or more employees, with a phased-in coverage in 2028 and 2029 for smaller employers.
- State paid family and medical leave (PFML) program planned (payroll-funded) with premium rates to be set by October 1, 2027, premium contributions to begin April 1, 2028, and benefits to become available December 1, 2028
What does this mean: Employers should begin preparing payroll systems for leave tracking and future payroll deductions.
Maryland: Ongoing Wage Complexity & Upcoming Payroll Changes
Maryland continues to require careful compliance due to state and local wage differences and upcoming payroll-based leave programs.
Minimum Wage: State vs. Local Rates
- Statewide minimum wage remains $15.00/hour.
However, local rates are increasing:
- Montgomery County: (Effective July 1, 2026) (Montgomery County Office of Human Rights)
- $18.00 for large employers
- $16.50 for mid-sized employers
- $15.95 for small employers
- Howard County: (Effective July 1, 2026) (Howard County CB82-2021)
- $16.00 for smaller employers and certain categories covered, in line with the rate already applicable to larger employers
What does this mean: Employers must track employee work locations to ensure compliance with local wage requirements.
Pay Transparency
(Ongoing Requirement since October 1, 2024, MD SB 525)
- Wage ranges and benefits must be included in job postings.
What does this mean: Multi-state employers should ensure consistency between Virginia and Maryland postings.
Paid Family & Medical Leave (FAMLI) (MD HB 102)
- Payroll contributions begin January 1, 2027
- Estimated contribution rate: approximately 0.90% of wages (shared employer/employee)
What does this mean: Employers should begin preparing for new payroll withholdings and employer contributions.
Key Takeaways
- Virginia is rapidly increasing regulations around pay transparency plus wage compliance.
- Maryland continues to add complexity with local wage variations and upcoming payroll taxes.
- Payroll systems and compensation data are now central to compliance.
Action Checklist
- Update job postings to include compliant pay ranges (Virginia and Maryland)
- Model Virginia minimum wage increases through 2028.
- Review compensation plans (bonuses, commissions, incentives)
- Update employment agreements and non-compete provisions (Virginia)
- Track employee work locations for proper wage rates (Maryland)
- Begin preparing for paid leave payroll contributions (2027+)
How We Can Help
Our team is actively engaged in helping clients navigate these changes, including:
- Compensation and pay transparency audits.
- Multi-state payroll compliance reviews
- Policy and agreement updates
- Payroll system readiness for upcoming leave programs.
If you have questions about how these changes affect your organization, please contact your Brown Edwards advisor.
This communication is for informational purposes only and should not be considered legal advice.