As explained in two prior posts — “Low-wage” employees are now exempt from 10 noncompete laws. Who are these employees and where are they exempt? and Happy New Year! Are your noncompetes ready? — ten states currently have wage thresholds or other criteria that must be satisfied before a noncompete can be used for a particular employee.
The ten states are: Oregon (originally in 2008, though later updated in 2021), Illinois (in 2016, though updated in 2021), Massachusetts (in 2018), Maine (in 2019), Maryland (in 2019), New Hampshire (in 2019), Rhode Island (in 2020), Virginia, (in 2020), Washington (in 2020), and Nevada (in 2021).
To help, we have updated our chart summarizing the current criteria in each of the states. (Note that the specific dollar values may be subject to increase for inflation or otherwise.)
Wage Threshold (January 2022)
|Maine||400% of the federal poverty level ($54,360 (est.))|
|Maryland||$15 per hour or $31,200 annually|
|Massachusetts||Nonexempt under the Fair Labor Standards Act|
|Nevada||Paid solely on an hourly wage basis, exclusive of tips or gratuities|
|New Hampshire||$14.50 per hour (2x federal minimum wage) or tipped minimum wage, whichever applies|
|Rhode Island||250% of the federal poverty level for individuals ($33,975 (est.)) or nonexempt under the Fair Labor Standards Act|
|Virginia||Average weekly wage in Virginia ($67,080†† (est.))|
|Washington||$107,301.04 ($268,252.59 for independent contractors)|
It’s also important to stay abreast of the latest developments around the country. As of today, there are over 10 more states considering low-wage thresholds. They are Colorado, Georgia, Iowa, Kentucky, Minnesota, Missouri, New York, Oklahoma (which currently bans employee noncompetes), Pennsylvania, Vermont, and West Virginia. We will keep you posted on each, and how they progress.
In the meantime, you may also want to check your agreements more generally to make sure you are complying with the noncompete laws in all states in which you have employees. Our 50-state noncompete chart (updated regularly to keep track of the changing laws) can serve as a starting point.
††Please note that this number has been corrected based on Virginia’s Department of Labor and Industry announcement of the weekly threshold of $1,290 per week for 2022.