While the Federal Trade Commission no longer seeks to ban non-competes nationwide, individual states continue adding limits on restrictive covenants including non-competition provisions and non-solicitation provisions. One common limit is a minimum compensation level, which adjusts regularly to keep up with inflation. This article provides the compensation thresholds for 2026.
BACKGROUND
Four states have banned all non-competes for employees: California, Minnesota, North Dakota, and Oklahoma. (Wyoming adopted significant limits in 2025, but not a flat ban.) Some states exempt certain industries, most commonly healthcare. More common is setting a minimum compensation level for employees, as is the case in eleven states and the District of Columbia.
Organizations with employees in multiple states need to check with counsel before entering such agreements, and certainly before attempting to enforce them. A “one size fits all” approach is not likely to work—and it could even expose the employer to lawsuits, investigations, and fines. Even a “choice of law” clause that tells courts to apply only the law of an enforcement-friendly state may not succeed.
2026 UPDATES
This table summarizes the minimum annualized compensation required for an employee working in these states to be legally held to a non-compete. These salary thresholds generally include all compensation payments (salary, bonus, incentives, commissions) but not fringe benefits. Hyperlinks on state names show the official sources.
The highest floor is $162,164 in the District of Columbia. Three western states (Colorado, Oregon, and Washington state) have thresholds around $125,000. In Illinois, Maine, and Maryland, the minimum salary falls between $45,000 and $75,000. Several other states shield employees making under $40,000 or so.
*These states require the employees to be exempt under the federal Fair Labor Standards Act (FLSA). The most common exemptions require: (1) being paid on a salary basis, not hourly; (2) making at least a threshold amount in annualized salary; and (3) having exempt duties such as professional, executive, administrative, sales, or certain technology responsibilities.
**Oregon requires the employees to be exempt not just under the federal FLSA but under stricter state law as well. See Ore. Rev. Stat. 653.295(b).
These thresholds may vary in certain circumstances, such as when an employee’s base salary is under the threshold but he or she usually makes more in commissions, incentives, or bonuses. Consult with an employment attorney before entering or enforcing non-competes and other restrictive covenants.
