New Restrictive Covenant “Low-Wage” Criteria (Updated June 20, 2024)

As you may recall, eleven states and Washington, D.C. have adopted minimum compensation thresholds or other criteria related to protecting workers from noncompetes based on wage or similar criteria.

In order of effective date, they are: Oregon (2008; updated 2022), Illinois (2016; updated 2022), Massachusetts (2018), Maine (2019), Maryland (2019; updated 2023; refined in 2024), New Hampshire (2019), Rhode Island (2020), Virginia, (2020), Washington (2020), Nevada (2021), Colorado (2022), and Washington, D.C. (2022).

But note that they are not all static.

In six of these states and D.C., the thresholds are to be determined annually: Colorado, Maine, Oregon, Rhode Island, Virginia, Washington, and Washington, D.C.

Although not determined annually, Maryland seems inclined to occasionally increase and expand its thresholds through additional legislation.

The remaining states either have no regular increases (Illinois and New Hampshire) or use a different standard (Massachusetts and Nevada).

Some of these states also have thresholds for the use of other restrictions: nonsolicitation agreements (Colorado, Illinios, and, depending on the scope of the covenant, Washington); no-recruit agreements (Illinois); no-service agreements (Virginia and Washington); and conflict-of-interest/anti-moonlighting policies and restrictions (Maryland and Washington, D.C.).

The details are as follows and as in our updated chart:

StateNoncompete Wage Thresholds and Similar Criteria (2024)(Criteria Applies to Other Restrictive Covenants Where Indicated)
Colorado$123,750 (total “annualized cash compensation”)

$74,250 for nonsolicitation agreements

Illinois$75,000 (total “earnings”)

$45,000 for nonsolicitation agreements and no-recruit agreements

Maine400% of the federal poverty level (“wages” of $60,240)
Maryland$22.50 per hour (150% of state minimum wage, roughly $46,800excluding overtime); $350,000* (“total annual compensation”) for healthcare providers providing direct patient care (*effective July 1, 2025)

Applies to conflict-of-interest/anti-moonlighting policies and restrictions.

MassachusettsNonexempt under the Fair Labor Standards Act
NevadaPaid 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
Oregon$113,241 (total “annual gross salary and commissions”)
Rhode Island250% of the federal poverty level for individuals (wages of $37,650 for the first 40 hours) or nonexempt under the Fair Labor Standards Act
VirginiaAverage weekly wage ($1,410) in Virginia ($73,320 (est.)); excludes anyone “whose earnings are derived, in whole or in predominant part, from sales commissions, incentives, or bonuses paid to the employee by the employer.” Other separate criteria for exemption.

Applies to no-service agreements where customer initiates contact and employee does not solicit.

Washington$120,559.99 (total “earnings” in box one of W-2)

$301,399.98 for independent contractors (1099-Misc payments)

Applies to no-service agreements and nonsolicits beyond current customers

Washington, D.C.$154,200 ($257,000 for medical specialists)

Applies to conflict-of-interest/anti-moonlighting policies and restrictions.

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Firm resources: 

We know how hard it is to keep up with the ever-changing requirements around the country. To help, we have created the following resources (available for free):

We hope you find all of these resources useful. More are coming.

And please note that we are grateful for all of the input we’ve received over the years, and welcome any suggestions for improvements that you may be willing to share.

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*A huge thank you to Erika Hahn for all of her extraordinary help in tracking and monitoring all of the bills around the country and helping me make sure that all of our resources are current and accurate!