Robert S. Teachout, SHRM-SCP, Brightmine Legal Editor
Employers in seven states will need to pay more compensation in 2025 to employees who are subject to a noncompete agreement.
Although the Federal Trade Commission’s proposed rule to ban noncompete agreements was blocked and is likely to be abandoned by the Trump administration, many states laws restricting their use are still in effect. One way some states restrict noncompete agreements is setting employee income thresholds below which employers are prohibited from requiring an employee to enter a noncompete agreement.
To ensure that their salary restrictions remain relevant and effective in fulfilling their intended purposes, seven states increase the salary levels annually based on the Consumer Price Index (CPI) for inflation or another index.
The following adjust their salary thresholds based on the CPI:
- Oregon: Oregon’s threshold is increased from $113,241 in 2024 to $116,427 in 2025.
- Washington: Washington’s noncompete earning threshold is increased from $120,559.99 to $123,394.17 for employees, and from $301,399.98 to $308,485.43 for independent contractors.
- Washington D.C.: Starting in 2024, D.C.’s threshold is adjusted annually based on the Consumer Price Index. The 2025 threshold has not been announced yet, leaving the 2024 threshold of $154,200 in effect.
Maine and Rhode Island adjust their salary threshold based on the federal poverty level:
- Maine: Maine’s threshold is 400% of the federal poverty level, raising the wage level from $60,240 in 2024 to $62,600 in 2025.
- Rhode Island: Rhode Island’s threshold is set as 250% of the federal poverty level, increasing its 2024 threshold of $37,650 to $39,125 in 2025.
Colorado and Virginia each increase their threshold based on a wage level defined by their law:
- Colorado: Colorado’s noncompete threshold is based on the state Department of Labor’s definition of a “highly compensated” worker, which is updated annually. The state also has a nonsolicitation agreement threshold equal to 60% of the noncompete threshold. In 2025, the noncompete threshold increased from $123,750 to $127,091, and the nonsolicitation threshold went from $74,250.00 to $76,254.60.
- Virginia: Virginia’s threshold is based on the average weekly wage, which increased its 2024 threshold of $73,320.00 to $76,081.20 in 2025.
Employers in these states that have entered or expect to enter a noncompete agreement with any employees should review and modify their agreements and consider adjusting the compensation of relevant employees to meet the new threshold requirements.
About the author
Robert S. Teachout, SHRM-SCP
Legal Editor, Brightmine
Robert Teachout has more than 30 years’ experience in legal publishing covering employment laws on the state and federal level. At Brightmine, he covers labor relations, performance appraisals and promotions, succession and workforce planning, HR professional development and employment contracts. He often writes on the intersection of compliance with HR strategy and practice.
Before joining Brightmine, Robert was a senior HR editor at Thompson Information Services, covering FMLA, ADA, EEO issues and federal and state leave laws. Prior to that he was the primary editor of Bloomberg BNA’s State Labor Laws binders and was the principal writer and editor of the State Wage Assignment and Garnishment Handbook. Robert also served as a union unit leader and shop steward in the Washington-Baltimore Newspaper Guild of the Communications Workers of America. Actively involved in the HR profession, Robert is a member of SHRM at both the national and local levels, and gives back to the profession by serving as the communications vice president on the board of his local chapter.
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