Non-compete rules are constantly shifting. As states enact their own unique guidelines, complying with these changes is an ever moving target. This trend continues into 2026, with several states revising their employment agreement regulations.

For employers, staying ahead of these changes isn’t just a “best practice,” it’s a requirement to ensure your employment agreements remain enforceable and legally sound. Many states have updated their “highly compensated employee” definitions or adjusted their thresholds based on the Consumer Price Index (CPI) and federal poverty levels.

Here is a breakdown of the critical changes effective this year:

• Colorado: The 2026 proposed update to the “highly compensated employee” threshold for non-competes to $130,014, while the customer non-solicit threshold (60% of that) is $78,008.40.
• District of Columbia: The 2026 highly compensated thresholds govern who can be bound by non-competes. Thresholds are $162,164 for most employees and $270,274 for physicians. These amounts are scheduled to increase again in 2027.
• Illinois: While the $75,000 threshold remains, an amendment effective January 1, 2026 makes it against public policy for any employment-condition agreement to prevent protected concerted activity, shorten statutes of limitation, or impose non-Illinois law or out-of-state venues for Illinois employees’ claims. This affects how non-compete and related provisions can be structured.
• Maine: The 2026 income threshold for enforceable non-competes is $63,840 (400% of the federal poverty level).
• Maryland: From July 1, 2025, extensive new restrictions on non-competes for medical professionals took effect and continue to govern in 2026. Non-competes are prohibited for licensed medical professionals providing direct patient care who earn $350,000 or less annually. For those earning above that amount, terms are capped at one year and a 10-mile radius. Non-medical employees must earn more than 150% of the state minimum wage ($22.50/hour or $46,800/year); this will increase again on July 1, 2026.
• New Hampshire: Non-competes are unenforceable for employees earning ≤ 200% of the federal minimum wage. Any 2026 federal minimum wage increases will shift this cutoff.
• Oregon: The minimum income threshold for enforceable non-competes is $119,541 per year (CPI-adjusted).
• Rhode Island: A “low-wage employee” (exempt from non-competes) is defined as earning $39,900 or less (250% of the federal poverty level).
• Virginia: The “average weekly wage of the Commonwealth” (used to define low-wage employees who cannot be bound by non-competes) is $1,507.01 per week.
• Washington: The minimum annual earnings required for a valid non-compete agreement is $126,858.83. Because the state explicitly requires annual CPI adjustments, the threshold is set to increase along with that adjustment.

Given the potential operational, legal, and strategic implications of these changes, we recommend that organizations review their current non-compete provisions and related restrictive covenants to ensure ongoing compliance.

Navigating the nuances of state-specific regulations is a heavy lift for any HR department, but you don’t have to carry it alone. As The Human Resource Resource, The Employer Group is built to manage these complexities for you. Contact us today to see how our team can provide the expert oversight and HR consulting services necessary to keep your business protected.

 

 

 

This information does not constitute legal advice.