States Increase 2025 Noncompete Agreement Salary Thresholds
Author: Robert S. Teachout
February 13, 2025
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.