States›Vermont

Vermont Employer HR Compliance Guide

Vermont is a high-compliance state with frequent legislative updates, including significant 2025 expansions to leave law, pay transparency, and worker protections. The overall compliance burden is moderate-to-high, especially for small employers navigating posting requirements and expanded family leave obligations. Major recent changes include Act 155 (pay transparency, July 2025), Act 32 (expanded leave, July 2025), and H.201 adding criminal history as a protected class.

Key Facts — Vermont

Minimum Wage: $14.42/hour effective January 1, 2026 (up from prior year); tipped employee base wage is $7.21/hour. Vermont adjusts its minimum wage annually based on CPI-U with a 5% maximum cap and no decreases permitted. No significant local variations; state rate applies statewide.
Pay Transparency: Act 155 (H.704), effective July 1, 2025, requires employers with five or more employees (at least one in Vermont) to include wage ranges in all written job advertisements for Vermont-based or predominantly Vermont-remote positions. Commission-based roles must disclose the commission structure; tipped roles must disclose the tipped nature plus the base wage or range. Violations are subject to enforcement by state agencies.
Paid Family & Medical Leave: Vermont does not have a mandatory state-run paid family and medical leave insurance program. However, the state operates a voluntary PFML program for private employers and expanded public-employee PFML coverage. Employers should monitor ongoing legislative efforts, as proposals for a broader mandatory program have been discussed.

Priority Compliance Actions

1Update payroll systems to reflect the $14.42/hour minimum wage and $7.21/hour tipped base wage effective January 1, 2026.
2Audit all active and future job postings to include compliant wage ranges or required disclosures for commission and tipped positions per Act 155.
3Revise leave policies to incorporate Act 32 expansions: bereavement, safe leave, military qualifying exigency, and the broadened family member definition, effective July 1, 2025.
4Train hiring managers on the salary history ban and on the new criminal history protected class under H.201 to prevent discriminatory screening practices.
5Post updated Vermont labor law notices in the workplace and ensure the current minimum wage poster reflects the 2026 rate.

Leave Laws

Federal FMLA applies to Vermont employers with 50+ employees. Vermont's Parental and Family Leave Act (VPFLA) applies to employers with 10+ employees for parental leave and 15+ for family leave. Act 32 (effective July 1, 2025) significantly expanded leave to include bereavement leave, safe leave, and military qualifying exigency, and broadened the definition of 'family member' to include domestic partners, grandparents, grandchildren, and siblings. Vermont also requires earned sick leave: employers with 6+ employees must allow accrual of up to 40 hours/year at a rate of 1 hour per 52 hours worked.

Wage & Hour

Vermont follows federal overtime rules (1.5x for hours over 40/week) with no state-specific daily overtime requirement. The tipped wage base is $7.21/hour and tips must bring total compensation to at least $14.42/hour or the employer must make up the difference. Final paychecks are due on the next regular payday following separation. Pay frequency must be at least twice per month (semi-monthly), and Vermont requires expense reimbursement for necessary business costs under general wage law principles.

Worker Classification

Vermont is an at-will employment state, though implied contract and public policy exceptions apply. Independent contractor status is evaluated under an ABC test: the worker must be free from control, perform work outside the usual course of the hiring entity's business, and be customarily engaged in an independent trade or business. Non-compete agreements are generally enforceable in Vermont if reasonable in scope, duration, and geographic reach, though courts scrutinize them carefully and there is no blanket statutory prohibition.

Hiring & Onboarding

Vermont does not have a statewide ban-the-box law for private employers, but H.201 (effective July 1, 2025) added 'criminal history' as a protected class under 21 V.S.A. § 495, restricting discriminatory use of criminal records in employment decisions. Vermont prohibits salary history inquiries under 21 V.S.A. § 495, and employers may not retaliate against applicants or employees for discussing wages. New hire reporting is required within 10 days to the Vermont New Hire Registry. Drug testing is permitted but must follow state guidelines on timing, notice, and confirmation testing.

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