Vermont Labor Laws 2026: A Complete Guide for HR & Employer Compliance

Accurate as of May 8, 2026. This guide is informational and not legal advice. For specific situations, consult licensed Vermont employment counsel.

Vermont compresses more 2025 employment-law change into a single statehouse than most states manage in five years. On June 4, 2024, Governor Phil Scott signed Act 155 (H.704), the state's first pay transparency mandate, with a July 1, 2025 effective date. On May 22, 2025, he signed Act 32, which expanded the Parental and Family Leave Act to include bereavement, safe leave, and military qualifying-exigency leave, and broadened the definition of "family member" to include domestic partners, grandparents, grandchildren, and siblings. The same legislative session reworked the workers' compensation system, added criminal-history protections, and pushed the state minimum wage to $14.42 per hour starting January 1, 2026.

This guide covers what Vermont HR teams need to know in 2026. The wage rates and tipped formula. The Earned Sick Time Act accrual math. The pay transparency posting rule and what counts as a "wage range." The brand-new short-term family leave entitlement under 21 V.S.A. § 472a. The salary history ban under § 495m. The CROWN Act protections layered into § 495d. The ABC test for independent contractor classification. Vermont's distinctive drug testing restrictions under § 513 and § 514. The Notice of Potential Layoffs Act and how it overlaps with federal WARN. Each section links the statute, names the agency, and flags every dollar amount and effective date.

It also points to where AllVoices fits. Vermont employers run small HR teams and big compliance footprints. A single source of truth for employee complaints is the difference between a clean Department of Labor audit and a messy one.

The 2026 Vermont Employment Law Updates HR Teams Should Know First

Vermont's 2024 and 2025 sessions reshaped almost every section of the Fair Employment Practices Act and added two brand-new leave categories. The biggest changes HR should track right now:

• Minimum wage increase to $14.42: Effective January 1, 2026 under 21 V.S.A. § 384. The tipped employee base wage rises to $7.21 per hour.
• Pay transparency (Act 155 / H.704): Effective July 1, 2025. Employers with five or more employees and at least one Vermont-based worker must include wage ranges in written job advertisements.
• Expanded Parental and Family Leave (Act 32): Effective July 1, 2025. Adds bereavement, safe leave, and military qualifying exigency. Expands the definition of family member to include domestic partners, grandparents, grandchildren, and siblings.
• Criminal history protection: H.201 added "criminal history" to the list of protected categories under 21 V.S.A. § 495 effective July 1, 2025. [VERIFY: H.201 enactment status]
• Workers' compensation reforms: Effective July 1, 2025. Translation services for non-English-fluent injured workers, escalating late-payment penalties (5%, 10%, 15%), and quarterly late-payment reporting starting October 2025.

The detail on each of these, and every other statute that touches HR in Vermont, is below.

Vermont Minimum Wage and Tipped Wage Rules

21 V.S.A. § 384 sets the Vermont minimum wage and adjusts it annually for inflation under a capped formula.

What is the Vermont minimum wage in 2026?

• Standard minimum wage (effective January 1, 2026): $14.42 per hour.
• Tipped employee base wage: $7.21 per hour (one-half the minimum).
• Adjustment formula: annual increase equal to 5% or the CPI-U change for the prior 12 months ending September 1, whichever is smaller. The wage cannot decrease.

Cities and counties in Vermont do not set local minimum wages. The state rate applies statewide.

Who counts as a tipped employee in Vermont?

Under 21 V.S.A. § 384, a "service or tipped employee" is an employee of a hotel, motel, tourist place, or restaurant who customarily and regularly receives more than $120 per month in tips. Outside that industry list, the tipped wage does not apply, and the full minimum wage of $14.42 per hour is owed.

The employer is responsible for confirming tips plus the cash wage equal at least $14.42 per hour for every hour worked. If the tip credit math falls short in any pay period, the employer makes up the difference.

When must Vermont employers pay wages?

21 V.S.A. § 342 requires weekly payment of wages within six days after the close of the pay period. Employers can switch to biweekly or semi-monthly with written notice to affected employees and at least 21 days advance notice. Less frequent pay schedules require Department of Labor approval. [VERIFY: pay frequency notice details]

Vermont Overtime Rules and Exemptions

Vermont follows a federal-style 40-hour weekly overtime rule with a list of state-specific exemptions that differ from the federal Fair Labor Standards Act.

When is overtime owed in Vermont?

An employer must pay an employee at least one and a half times the regular wage rate for hours worked over 40 in a workweek. Vermont has no daily overtime trigger and no seventh-day premium.

Who is exempt from Vermont overtime?

21 V.S.A. § 384(b) carves out several categories from the state overtime rule:

• Retail or service establishments where 75% or more of annual sales are not for resale and qualify as retail in the industry.
• Amusement or recreational establishments that operate seven months or fewer per year, or whose six-month receipts are no more than one-third of the other six months' receipts the prior year.
• Transportation businesses for persons or property to which federal FLSA overtime does not apply.
• Political subdivisions of the state.
• State employees covered by federal FLSA.
• Permanent employees of the Vermont General Assembly.

Federal FLSA executive, administrative, professional, computer, and outside sales exemptions still apply on top of state exemptions. Vermont does not set its own salary threshold for the white-collar exemptions. The federal threshold of $35,568 annual ($684 weekly) controls. [VERIFY: any 2026 federal salary threshold update]

Vermont Final Paycheck and Vacation Pay Requirements

21 V.S.A. § 342 sets the deadlines for paying out separated employees. The penalty for non-compliance is steep, double the unpaid wages plus costs and attorney's fees.

When must final wages be paid in Vermont?

• Discharged or laid off (involuntary): within 72 hours of termination.
• Employee quits voluntarily: by the last regular payday. If there is no regular payday, by the following Friday.
• Payment method: by check, direct deposit (with written employee authorization), or other agreed electronic method.

Is accrued vacation pay owed at separation?

Yes. Vermont treats accrued vacation as wages at termination. Employers cannot disclaim payout through silence; if the policy provides for vacation accrual, the balance is owed at separation. A written "use it or lose it" policy can limit accrual during employment, but unused accrued time at separation is generally payable.

What are the penalties for late or unpaid final wages?

Under 21 V.S.A. § 347, an employer who violates the wage payment statutes forfeits to the affected individual twice the value of the unpaid wages, plus costs and reasonable attorney's fees. The action must be brought while the wages remain unpaid or improperly paid. The double-damages rule makes Vermont one of the more aggressive wage-claim states in the Northeast.

Vermont Pay Transparency (Act 155 / H.704)

Vermont's pay transparency law took effect July 1, 2025. It is one of the broadest in the country in scope, applying to most postings for jobs that touch Vermont.

Which employers are covered?

Employers with five or more employees and at least one Vermont-based worker must comply. The five-employee count is in total across all locations, not just Vermont.

What must be in a job posting?

• Wage range: the minimum and maximum annual salary or hourly wage the employer, acting in good faith, expects to pay.
• Commission positions: must disclose that the role is commission-based. A wage range is not required.
• Tipped positions: must disclose the tipped nature of the role and either the base wage or wage range.
• Internal and external postings: the rule applies to both, including roles open for promotion or transfer.
• Remote roles: covered if predominantly performed at a Vermont office or for Vermont-based supervision.

What rights do current employees have?

A current employee can ask for the wage range associated with their own position. The employer must provide a clear answer. Employers cannot retaliate against employees who ask for, share, or compare wage information. The wage discussion protections under 21 V.S.A. § 495 apply to all Vermont employers, regardless of employee count.

What does compliance look like in practice?

• Audit every active job posting for a wage range or applicable disclosure.
• Document the good-faith range methodology so a future complaint has a defensible basis.
• Train recruiters and hiring managers to talk about ranges, not historical pay.
• Update applicant tracking system templates to require a range field before publishing.

Vermont Salary History Ban (21 V.S.A. § 495m)

Vermont's salary history ban predates the pay transparency law. Effective July 1, 2018, an employer in Vermont cannot:

• Inquire about or seek information regarding a prospective employee's current or past compensation from the prospective employee or from a current or former employer.
• Require a prospective employee's current or past compensation to satisfy minimum or maximum criteria.
• Decide whether to interview a candidate based on the candidate's compensation history.

"Compensation" includes wages, salary, bonuses, benefits, fringe benefits, and equity-based compensation.

What is the voluntary disclosure exception?

If a prospective employee voluntarily discloses information about current or past compensation, the employer may, after extending an offer that includes a compensation amount, ask the candidate to confirm the disclosed information. That is the only path to a verified comparison.

How does this interact with pay transparency?

The two statutes work together. Vermont employers post the range up front, set the offer based on internal benchmarks, and have no need to anchor on the candidate's last salary. A clean recruiter script is the simplest compliance tool.

Vermont Earned Sick Time Act (21 V.S.A. §§ 481–486)

Vermont was the fifth state to pass an earned sick time law. Coverage is broad and the accrual math has been unchanged since 2019.

How much sick time accrues?

• Accrual rate: one hour of paid sick time per 52 hours actually worked, including overtime.
• Annual cap: 40 hours per year.
• Waiting period: employers may impose up to a one-year waiting period for newly hired employees. Sick time still accrues during the wait, but cannot be used until the wait is satisfied.
• Carryover: earned, unused time carries over from year to year, subject to the 40-hour annual cap.

Who is covered by the Earned Sick Time Act?

Most employees whose primary place of work is in Vermont. The statute lists a handful of exclusions, including independent contractors, seasonal or temporary employees working 20 or fewer weeks per year in a position not intended to last more than 20 weeks, federal government employees, certain permanent state employees in the classified service, per diem employees at healthcare facilities, employees under 18, certain school district substitute educators, and certain sole proprietors and executive officers.

What can earned sick time be used for?

• The employee's own mental or physical illness, injury, or healthcare appointment, including diagnostic, preventative, and routine care.
• Care for a sick or injured family member, including accompanying them to long-term care appointments.
• Needs related to domestic violence, sexual assault, or stalking.
• Care for a family member during a public health or safety facility closure.

Are documentation requirements limited?

Yes. An employer can request documentation only after the employee has used earned sick time on three or more consecutive scheduled workdays, and the request must be reasonable. The Act limits surveillance of leave use and prohibits retaliation.

Vermont Parental and Family Leave (Act 32 Expansion)

Vermont's Parental and Family Leave Act predates the federal FMLA and runs on a different employer-size trigger. Act 32, signed May 22, 2025 by Governor Phil Scott and effective July 1, 2025, expanded the statute in three ways.

Which employers are covered?

• Parental leave (12 weeks): employers with 10 or more employees who work an average of 30 or more hours per week.
• Family leave (12 weeks): employers with 15 or more employees who work an average of 30 or more hours per week.
• Short-term family leave (24 hours): employers with 10 or more employees.
• Employee eligibility: 30 hours per week on average for at least one year.

What does parental leave cover?

Up to 12 weeks of unpaid, job-protected leave for pregnancy, childbirth, or within one year following the placement of a child under age 16 with the worker for adoption.

What does family leave cover (post-Act 32)?

Up to 12 weeks per 12-month period for:

• A serious illness of the employee.
• A serious illness of a family member.
• Bereavement leave following the death of a family member (newly added in Act 32).
• Safe leave for victims of crime or domestic violence (newly added in Act 32).
• Military qualifying exigency related to a family member's call to active duty (newly added in Act 32).

Who counts as a family member after Act 32?

Act 32 broadened the definition to include the employee's spouse, child, parent, parent-in-law, domestic partner, grandparent, grandchild, and sibling. The expansion mirrors what other northeastern states did during the 2023 to 2025 sessions.

What is the short-term family leave entitlement?

Under 21 V.S.A. § 472a, eligible employees can take up to 4 hours of unpaid leave in any 30-day period, capped at 24 hours per 12-month period, to:

• Participate in preschool or school activities for a child.
• Accompany a family member to routine medical or dental appointments.
• Respond to a family medical emergency.
• Attend professional care appointments for a family member.

Short-term family leave is intermittent by design. Employers must allow employees to use accrued paid leave to cover the time if they choose.

How does this interact with FMLA?

FMLA is federal and applies to employers with 50 or more employees. Vermont parental and family leave applies at lower thresholds, so a Vermont employer with 10 to 49 employees may be subject to state leave but not federal FMLA. Where both apply, leave runs concurrently if properly designated. Employers should issue an FMLA designation notice within five business days of receiving notice of a qualifying event.

Vermont Fair Employment Practices Act (21 V.S.A. § 495)

Vermont's Fair Employment Practices Act covers nearly every employer in the state. The threshold is one employee, dramatically lower than the federal Title VII floor of 15.

Who is protected under FEPA?

• Race (including hair type, hair texture, and protective hairstyles under the CROWN Act amendments to 21 V.S.A. § 495d, effective July 1, 2024).
• Color.
• Religion.
• Ancestry.
• National origin.
• Sex (including pregnancy and related conditions).
• Sexual orientation.
• Gender identity.
• Place of birth.
• Crime victim status.
• Age.
• Qualified disability.
• HIV status.
• Criminal history (added by H.201, effective July 1, 2025). [VERIFY: H.201 enactment status]

What does the CROWN Act add?

Effective July 1, 2024, the CROWN Act added "traits associated with or perceived to be associated with race, including hair type, hair texture, hairstyles, and protective hairstyles" to the definition of race in FEPA. "Protective hairstyles" includes braids, cornrows, locs, twists, Bantu knots, afros, afro puffs, wigs, headwraps, and other head coverings. Grooming policies that prohibit these styles, even on facially neutral grounds, can support a discrimination claim.

Who enforces FEPA?

The Vermont Attorney General's Civil Rights Unit and the Vermont Human Rights Commission enforce FEPA, depending on the type of claim. Employees can file a charge with either agency or pursue a private right of action in state court. Federal claims under Title VII, the ADA, the ADEA, the PWFA, and the EPA are filed with the EEOC and can run alongside state claims.

What is the deadline to file?

A FEPA charge must be filed within 360 days of the alleged unlawful act under Vermont rule. Federal Title VII charges with the EEOC follow the standard 300-day deadline when a state agency claim is also filed. [VERIFY: 360-day filing window]

Sexual Harassment Policy and Training in Vermont

Vermont's sexual harassment statute, 21 V.S.A. § 495h, requires every employer to maintain a written anti-harassment policy and to provide it to every employee at hire and whenever the policy changes.

What must the written policy include?

• Statement of unlawfulness. A clear statement that sexual harassment is illegal and that retaliation for reporting harassment is also illegal.
• Definition with examples. A description of what sexual harassment looks like in practice.
• Range of consequences. A statement of disciplinary outcomes for harassers, up to and including termination.
• Internal complaint process. If the employer has more than five employees, the policy must describe how to file an internal complaint.
• External complaint resources. Contact information for the Vermont Attorney General's Civil Rights Unit, the Human Rights Commission, and the EEOC.

Is training required?

Training is "encouraged" by statute, not strictly required. Vermont employers and labor organizations are encouraged to conduct education and training for new employees and members within one year of hire, with additional supervisory training within one year of promotion. In practice, courts and the Attorney General weigh the existence and quality of training when assessing employer liability under the Faragher/Ellerth framework.

What does a defensible training program look like?

• Annual baseline training for all employees, ideally interactive rather than passive video.
• Separate annual training for supervisors and managers, with a focus on intake, response, and the duty to escalate.
• Documentation of who attended and when.
• Refresh and re-acknowledgment of the written policy at the same time as the training.

A documented intake and investigation workflow is the other half of the defense. The Attorney General looks for evidence of prompt and effective investigation, not just a poster on the wall.

Crime Victim Status and Crime Victim Leave

Vermont protects crime victims under FEPA and provides a separate leave entitlement.

What is the crime victim leave?

An employee who has been continuously employed by the same employer for six months for an average of at least 20 hours per week has the right to take unpaid leave to attend criminal proceedings where the employee has a legal right or obligation to appear. The employer must continue benefits during the leave and reinstate the employee to the same or a comparable position upon return.

How does criminal history protection layer on top?

H.201, with a July 1, 2025 effective date, added "criminal history" to the FEPA list of protected categories. Employers can no longer make hiring or termination decisions based purely on a candidate's record where the conviction does not bear a substantial relationship to the duties of the position. The protection works alongside Vermont's longstanding ban-the-box rule, which has prohibited public and many private employers from asking about criminal history on initial applications since July 1, 2017. [VERIFY: criminal history coverage details]

Pregnancy, Childbirth, and Lactation Accommodation in Vermont

Vermont law treats pregnancy as a protected characteristic under FEPA and requires reasonable accommodations on top of the federal floor.

What pregnancy accommodations are required?

Under 21 V.S.A. § 495 and § 495k, employers must engage in an interactive process to provide reasonable accommodations for pregnancy, childbirth, and related medical conditions, unless doing so would create an undue hardship. Common accommodations include modified work schedules, additional break time, temporary transfer to less strenuous duties, seating, and time off for medical appointments.

How does the federal PWFA apply?

The federal Pregnant Workers Fairness Act, enacted in June 2023, requires employers with 15 or more employees to provide reasonable accommodations for known limitations related to pregnancy, childbirth, and related medical conditions. Vermont's law applies at one employee. Larger employers run both frameworks through a single intake to avoid accommodation-request handling errors.

What lactation accommodations apply?

Vermont employers must comply with both state law and the federal PUMP Act. Employers must provide reasonable break time and a private space, other than a bathroom, for an employee to express milk for up to three years after the child's birth under Vermont law. The federal PUMP Act mandates breaks for one year. Apply the longer Vermont period.

Cannabis, Drug Testing, and Workplace Privacy in Vermont

Vermont legalized recreational cannabis in 2018 and added a regulated retail market in 2022. The employment-law implications are significant. Vermont is one of the more restrictive states for workplace drug testing.

Can Vermont employers discipline for off-duty cannabis use?

Mostly no. Under Vermont law, an employer cannot refuse to hire, employ, or otherwise penalize a person 21 or older solely for that person's consuming cannabis outside the employer's property. Workplace use, possession, transfer, sale, and growth are not protected. Employers can adopt and enforce drug-free workplace policies, discipline for on-duty use or impairment, and terminate for violation of those policies, including a positive test where impairment is the issue.

When can a Vermont employer drug-test an employee?

21 V.S.A. § 513 and § 514 create some of the strictest workplace drug testing rules in the country.

• No random or company-wide testing of current employees, except where required by federal law or regulation (DOT-regulated roles, federal contractors, etc.).
• Probable cause standard: the employer must have probable cause to believe the employee is using or under the influence of drugs in violation of the employer's policy.
• Employee assistance plan: employers must offer a bona fide rehabilitation program and cannot terminate a first-time positive test if the employee enrolls in the program and successfully completes it.
• No blood draws. Drug tests cannot require a blood sample.
• Cannabis testing limited to non-therapeutic levels. Tests can only screen for non-therapeutic levels of cannabis or cannabinoids.

What about pre-employment testing?

21 V.S.A. § 511 limits pre-employment testing to applicants who have been given a written conditional offer of employment, the test is part of a comprehensive drug or alcohol screening program, and the applicant has been given written notice of the policy. Random pre-employment testing is prohibited.

How should HR handle a positive test?

Slow down. Document probable cause if testing was based on it. Confirm the test was for non-therapeutic levels. Offer the employee assistance program if applicable. Distinguish between off-duty cannabis use, which is generally protected, and on-duty impairment, which is not. Coordinate with the employee's healthcare provider if a disability accommodation is implicated.

Vermont Occupational Safety and Health (VOSHA)

Vermont is one of the 22 states that operates its own state-plan OSHA agency. The Vermont Occupational Safety and Health Administration (VOSHA) is run jointly by the Department of Labor and the Department of Health, and enforces federal OSHA standards plus a small set of Vermont-specific requirements.

Who is covered by VOSHA?

VOSHA covers private-sector employers, state and local government employers, and most public-sector workplaces. Federal OSHA covers federal agencies and a handful of carve-outs (maritime work, postal employees on USPS premises). The dual coverage is the practical difference between Vermont and a federal-OSHA-only state like New Hampshire: public employees in Vermont have OSHA protection that public employees in New Hampshire do not.

What recordkeeping does VOSHA require?

• OSHA Form 300: Log of Work-Related Injuries and Illnesses. Maintained throughout the year.
• OSHA Form 301: Injury and Illness Incident Report. Completed for each recordable case within seven calendar days.
• OSHA Form 300A: Annual Summary. Posted in the workplace from February 1 through April 30 each year.
• Electronic submission: employers with 250 or more employees, and certain high-hazard industries with 20 or more, must submit Form 300A electronically through OSHA's Injury Tracking Application by March 2 each year.

What other safety requirements apply?

Federal OSHA general industry, construction, and recordkeeping standards. Vermont-specific protections for healthcare workers, school employees, and certain agricultural operations layer on top. Employers should run a written hazard assessment annually and document the corrective actions, regardless of size.

At-Will Employment and Wrongful Discharge in Vermont

Vermont follows the employment at-will doctrine. Either party can end the employment relationship at any time, with or without cause and with or without notice, unless a contract or statute says otherwise.

What are the limits on at-will termination?

• Discrimination statutes (FEPA, Title VII, ADA, ADEA, PWFA, EPA) prohibit termination based on protected characteristics.
• Retaliation protections under FEPA, the wage payment statutes, the Earned Sick Time Act, the Parental and Family Leave Act, and workers' compensation prohibit termination for protected activity.
• Whistleblower protections for reporting suspected violations of law to public bodies.
• Public policy wrongful discharge: Vermont recognizes a common-law tort claim where the termination was motivated by an employee's exercise of a legal right or refusal to engage in unlawful conduct.
• Implied contract: handbook language, oral statements, or course of conduct that suggests termination only for cause can support a breach of implied contract claim.

What policies signal at-will status to employees?

Most Vermont employee handbooks include an at-will disclaimer signed at hire. The disclaimer should be clear, prominently placed, and acknowledged in writing. It should also state that no manager or representative can change the at-will relationship except through a written agreement signed by an officer. Vague or contradictory handbook language has supported breach-of-contract claims in Vermont courts.

A clean termination process protects both at-will status and the company's record. Document performance issues. Provide written warnings where appropriate. Conduct exit interviews. Save all materials in a centralized HR record system. The investment pays off in the small number of cases where a former employee files a claim.

Domestic Violence and Sexual Assault Workplace Protections

Vermont layers several protections on top of FEPA for victims of domestic violence, sexual assault, and stalking.

What leave is available?

• Earned Sick Time Act: covered employees can use accrued earned sick time to address needs related to domestic violence, sexual assault, or stalking.
• Safe leave under Act 32: effective July 1, 2025, employees of covered employers can use family leave for safe-leave reasons including obtaining counseling, securing alternative housing, attending court proceedings, and protecting the employee's safety.
• Crime victim leave: employees with six months of continuous service at 20+ hours per week have the right to take unpaid leave to attend criminal proceedings.

What anti-discrimination protections apply?

Vermont's FEPA prohibits employment discrimination based on crime victim status. An employer cannot terminate, demote, or otherwise penalize an employee because the employee is a victim of crime, has reported a crime, or is participating in legal proceedings related to a crime.

What documentation can the employer require?

Reasonable documentation, but the employer must accept a court order, police report, restraining order, or signed statement from a victim service provider, attorney, or healthcare provider. The employer cannot demand more invasive proof. Confidentiality of all victim documentation is required.

Vermont Bereavement Leave (Act 32)

Bereavement leave became a covered category under the Parental and Family Leave Act on July 1, 2025. Employers with 15 or more employees who work an average of 30 or more hours per week must allow eligible employees to take bereavement leave following the death of a covered family member.

Who counts as a covered family member?

After Act 32, a "family member" includes the employee's spouse, child, parent, parent-in-law, domestic partner, grandparent, grandchild, and sibling.

How much leave is available?

Bereavement leave fits inside the 12-week annual family leave bank. Employers can adopt their own bereavement policies that provide additional time, paid or unpaid. Many Vermont employers pair the statutory entitlement with a paid bereavement bank of three to five days as a recruiting and retention practice.

What is the practical implementation guidance?

• Update the leave policy to reference bereavement as a qualifying reason.
• Train HR partners and managers to treat bereavement requests as protected leave, not informal time off.
• Document the request, the relationship, and the duration in the HRIS.
• Coordinate with FMLA where the bereavement involves a serious health condition that affects the employee.

Vermont Earned Sick Time: Documentation, Notice, and Carryover

The mechanics of administering earned sick time in Vermont reward employers that build the policy correctly from day one.

When can an employer require documentation?

Only after three or more consecutive scheduled workdays of leave. The request must be reasonable. The employer cannot demand details of the medical condition, the diagnosis, or any information beyond what is needed to verify the leave qualifies.

What notice can the employer require from the employee?

Reasonable notice. The Vermont Department of Labor accepts a same-day phone call, text message, or email for unforeseeable leave (an unexpected illness or injury). For foreseeable leave (a scheduled appointment, a planned procedure), the employer can require advance notice consistent with the time available.

What about carryover and front-loading?

• Carryover: earned, unused sick time carries over from year to year, subject to the 40-hour annual cap.
• Front-loading: employers can front-load 40 hours at the start of the year instead of accruing one hour per 52 worked. Front-loading simplifies tracking but does not allow the employer to require repayment of unearned time at separation.
• PTO substitution: a combined PTO bank can satisfy the Earned Sick Time Act if it provides at least the statutory amount and allows use for the same reasons.

What happens at separation?

Vermont law does not require payout of unused earned sick time at separation. The employer's policy controls. Most Vermont employers do not pay out earned sick time on the way out, distinguishing it from accrued vacation, which is treated as wages owed under § 342.

Vermont Wage Discussion and Anti-Retaliation

21 V.S.A. § 495 prohibits an employer from discriminating against any employee who has inquired about, discussed, or disclosed wages, or has been believed by the employer to have done so.

What does this protect?

• Asking a coworker about pay.
• Sharing one's own salary on social media or with a recruiter.
• Comparing pay across teams as part of a fairness conversation.
• Reporting a suspected pay-equity violation to the Attorney General or to internal HR.

What employer conduct is prohibited?

• Disciplining or terminating an employee for wage discussions.
• Requiring a contractual promise of confidentiality about wages.
• Conditioning employment on signing a pay-secrecy clause.
• Demoting, transferring, or otherwise retaliating in response to a wage discussion.

How does this interact with confidentiality agreements?

A confidentiality clause that broadly prohibits "discussing terms and conditions of employment" or "compensation information" is unenforceable in Vermont. Federal NLRA Section 7 protections reinforce the rule for non-supervisory employees. Audit existing agreements and remove or narrow any compensation-secrecy language.

Vermont Hiring Process: Pre-Offer and Post-Offer Steps

Vermont has built up an unusually detailed set of hiring rules over the past decade. A clean process keeps everything legal.

What is allowed during the pre-offer stage?

• Reviewing application materials.
• Conducting interviews focused on skills, experience, and culture fit.
• Asking about the candidate's salary expectations for the position (not history).
• Disclosing the wage range for the role under the pay transparency law.
• Conducting reference checks limited to job performance and qualifications.

What is prohibited pre-offer?

• Asking about salary history (21 V.S.A. § 495m).
• Asking about criminal history on initial applications (ban-the-box).
• Asking about pregnancy, family status, religion, age, or any other protected characteristic.
• Conducting drug tests, except for federal-compliance roles.
• Running a credit or background check before disclosure and consent under FCRA.

What can be done post-offer?

• Background check with FCRA disclosures and consent.
• Pre-employment drug test, with proper notice under 21 V.S.A. § 511.
• Confirming voluntarily disclosed salary history (if any).
• Eligibility verification under federal I-9 and E-Verify rules.
• Medical examinations limited to job-related and consistent with business necessity, with appropriate confidentiality.

Independent Contractor Classification in Vermont (ABC Test)

Vermont applies the ABC test to determine whether a worker is an employee or an independent contractor for unemployment insurance and workers' compensation purposes. The test is found in 21 V.S.A. § 1301.

What are the three prongs of the Vermont ABC test?

• A. Freedom from control. The worker is free from the hiring entity's control and direction in performing the services, both under the contract and in fact.
• B. Outside the usual course of business or off-site. The services are performed outside the usual course of the hiring entity's business, or outside all of the entity's places of business.
• C. Independently established trade. The worker is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as the services performed.

All three prongs must be satisfied for independent contractor status. Failing even one means the worker is an employee under state law.

What are the consequences of misclassification?

A misclassified worker triggers back assessments for unemployment insurance contributions, workers' compensation premiums, unpaid wages, unpaid overtime, and potentially state income tax withholding. The Vermont Department of Labor audits aggressively, particularly in construction, transportation, and platform-economy industries.

Federal exposure compounds the state risk. The IRS uses its own three-category common law test, the U.S. Department of Labor uses an economic-realities test, and the National Labor Relations Board uses yet another framework. A worker can be properly classified for one purpose and improperly classified for another.

How should HR run a contractor audit?

• Pull every active 1099 relationship.
• For each, score the three ABC prongs honestly.
• Look at the duration and exclusivity of the relationship; long, exclusive engagements lean employee.
• Reclassify proactively rather than waiting for an audit. The cost of voluntary correction is much lower than the cost of an enforcement action.

Vermont Workers' Compensation and the 2025 Reforms

Workers' compensation insurance is required for nearly every Vermont employer. The 2025 session added several procedural protections for injured workers and new penalties for late benefit payments.

Who must carry workers' compensation in Vermont?

Almost every employer with one or more employees, with limited exceptions for sole proprietors, partners, and certain agricultural and domestic workers. Coverage is mandatory regardless of part-time or full-time status. The penalty for failing to carry coverage includes a stop-work order, fines, and personal liability for the injured worker's claim.

What changed effective July 1, 2025?

• Translation services: employers must provide translation services to injured workers who do not speak English fluently.
• Late payment penalties: escalating penalties of 5%, 10%, or 15% based on how late the payment is.
• Quarterly reporting: beginning October 2025, employers must report late payments and reasons quarterly for one year.
• Medical case management (21 V.S.A. § 601(31)): a new statutory definition added to the preauthorization process. Medical case management covers planning and coordination of healthcare services with the goal of medical rehabilitation.

What injury reporting timeline applies?

An employer must report a work-related injury or illness to the Vermont Department of Labor and the workers' compensation carrier within 72 hours of notice. Late or missing reports can support a finding of bad faith and can trigger administrative penalties.

Vermont's Notice of Potential Layoffs Act

Vermont's state-level mass-layoff statute, sometimes called the "mini-WARN" law, runs alongside the federal WARN Act and uses different thresholds.

What triggers state notice?

Under 21 V.S.A. § 411, an employer that will engage in a business closing or mass layoff of 50 or more employees over a 90-day period must provide:

• 45 days advance notice to the Commissioner of Labor and the Secretary of Commerce and Community Development.
• 30 days advance notice to the chief elected official or administrator of each affected municipality and to any bargaining unit.
• Notice content: the approximate number of affected employees, job titles, and anticipated date of job loss.
• Final wages: all unpaid wages and compensation owed to laid-off workers must be paid.

How does the federal WARN Act layer on top?

The federal WARN Act applies to employers with 100 or more employees and requires 60 days of notice for plant closings (50 or more job losses at a single site) and mass layoffs (500 or more, or 50 to 499 if the count is 33% of the active workforce). Vermont employers conducting a covered event must satisfy both statutes. Notice content under federal WARN must include name and address of the employment site, whether the action is permanent or temporary, the date of the first separation, the schedule of subsequent separations, job titles affected, and a contact for additional information.

Jury Duty, Voting, and Military Leave in Vermont

Vermont protects civic leave at three layers: jury duty, voting time, and military service.

Is jury duty leave required?

Yes. Vermont law protects employees from termination, demotion, or other adverse action because of jury service. Leave is unpaid unless the employer's policy provides pay. Employees should give reasonable notice of a jury summons. The protection runs through the duration of the service.

Is voting leave required?

Vermont employers are required to allow employees a reasonable period of time to vote on election day if the employee does not have sufficient time outside working hours. Practice varies by employer; the safest approach is a written policy that confirms paid or unpaid time off and a notice procedure. Same-day voter registration is permitted in Vermont, which simplifies scheduling. [VERIFY: voting leave specifics]

What about military leave?

The federal Uniformed Services Employment and Reemployment Rights Act (USERRA) covers most military leave. Vermont law extends comparable protections to members of the Vermont National Guard called to state active duty by the governor. Employees are entitled to reinstatement with seniority, status, and benefits intact. Vermont employers should treat USERRA notice obligations and reinstatement rights as the floor and check Act 32 for any military-related expansion of family leave.

Personnel Files, Recordkeeping, and Posting Requirements

Vermont does not have a single statute granting employees an unconditional right to inspect personnel files, but it does impose recordkeeping and posting obligations on employers.

What records must be kept?

• Names, addresses, and job titles of employees.
• Hours worked each day and each week.
• Rate of pay and total wages paid each pay period.
• Deductions and the basis for each.
• Earned sick time accrual and use.
• Workers' compensation injury reports.

How long must records be kept?

• Wage and hour records: 3 years.
• Earned sick time records: 3 years.
• FLSA payroll records: 3 years (basic) and 2 years for supporting documents.
• I-9 forms: 3 years after hire or 1 year after termination, whichever is later.
• Tax records under IRC and FUTA: 4 years after the tax becomes due or is paid.
• OSHA Forms 300, 300A, 301: 5 years following the year covered.

What posters are required?

• Vermont Minimum Wage and Overtime Poster.
• Vermont Earned Sick Time Notice.
• Parental and Family Leave Notice.
• Sexual Harassment Notice (separate from the written policy).
• Workers' Compensation Notice from the carrier.
• Unemployment Insurance Notice.
• Federal posters: FLSA, FMLA (50+ employees), EEOC Know Your Rights, PWFA, OSHA, USERRA, employee polygraph protection.

Vermont Family and Medical Leave Insurance (VT-FMLI)

Vermont took the voluntary-insurance route to paid family and medical leave rather than the payroll-tax-funded mandatory route used by Massachusetts, Connecticut, and other northeastern states. The Vermont Family and Medical Leave Insurance Plan (VT-FMLI) is administered by The Hartford under contract with the state.

When does VT-FMLI apply?

The employer phase opened July 1, 2024, allowing private and non-state public employers with two or more employees to enroll. The individual phase opened in 2025, letting workers whose employers do not offer VT-FMLI, self-employed Vermonters, and one-employee firms buy coverage directly through an individual purchasing pool.

What does the plan provide?

• Wage replacement: 60% to 70% of the employee's average weekly pay, with additional options available subject to underwriting.
• Duration: 6 to 26 weeks per 12-month period, depending on the plan design.
• Plan structure: family and medical leave combined, or stand-alone family leave insurance.
• Funding: employer-paid, split, or employee-paid voluntary benefit.

How does VT-FMLI interact with the Parental and Family Leave Act?

The state Parental and Family Leave Act runs unpaid by default. VT-FMLI provides the wage replacement that the unpaid law leaves on the table. Employers offering VT-FMLI should designate the leave under the state act in writing, then run the wage benefit alongside. Coordination errors between the two are the most common compliance pitfall.

Vermont Whistleblower Protections

Vermont protects whistleblowers through several overlapping statutes rather than a single comprehensive law. The most commonly invoked are the FEPA retaliation provision under 21 V.S.A. § 495, the public-employee whistleblower act, and the wage payment retaliation rule.

What is protected?

• Reporting or threatening to report a suspected violation of law to a public body.
• Refusing to participate in activity the employee reasonably believes is unlawful.
• Cooperating with an investigation by a state or federal agency.
• Filing or supporting a wage claim, discrimination charge, workers' compensation claim, or safety complaint.
• Disclosing or asking about wages.

What remedies are available?

Reinstatement, back pay, lost benefits, restoration of seniority, attorney's fees, and in some cases compensatory and punitive damages. Vermont judges have shown a willingness to award attorney's fees in retaliation cases, which raises the cost-of-defense math significantly.

A documented internal grievance procedure is the best front-end defense. Most successful retaliation defenses turn on records, not memory. Treating retaliation prevention as a managed process pays off when an investigation lands.

Non-Compete Agreements in Vermont

Vermont does not have a comprehensive statute regulating non-compete agreements. Enforceability is decided by the courts under common-law reasonableness review.

What do Vermont courts consider?

• Legitimate business interest: trade secrets, confidential information, customer relationships, or training investments.
• Reasonableness of scope: duration, geography, and the activities restricted.
• Hardship to the employee: can the employee earn a living in their field while the restriction is in place?
• Public interest: particularly important in healthcare and other public-facing professions.
• Adequate consideration: a non-compete signed mid-employment without new consideration is vulnerable.

What is the legislative outlook?

H.205 in the 2025 to 2026 session would prohibit nearly all non-compete agreements, requiring agreements to be presented at the time of offer with a three-day review window and providing retaliation protections. The bill remains in committee. [VERIFY: H.205 status] Until and unless the legislature acts, employers should narrow scope, document consideration, and avoid blanket statewide bans.

What about the FTC non-compete rule?

The Federal Trade Commission's 2024 Non-Compete Rule was struck down by a federal district court in August 2024 and is not in effect. Vermont employers fall back on common-law review. [VERIFY: any 2026 federal action]

Background Checks and Ban-the-Box in Vermont

Vermont has had a "ban-the-box" rule since July 1, 2017. With the addition of "criminal history" as a protected class effective July 1, 2025, Vermont is now one of the more protective states in the country on the use of conviction information in hiring.

What does the ban-the-box rule require?

• An employer may not request criminal history information on the initial application.
• Conviction-related questions can be asked during the interview or after a conditional offer of employment.
• If the employer takes adverse action based on criminal history, the employer must give the applicant an opportunity to explain the conviction and any rehabilitation evidence.

What about FCRA when using a third-party vendor?

Federal Fair Credit Reporting Act rules apply on top of state law. Employers using a third-party background check vendor must:

• Provide a stand-alone written disclosure and obtain written consent.
• Send a pre-adverse action notice with a copy of the report and a summary of FCRA rights before deciding not to hire.
• Allow time, typically five business days, for the applicant to dispute the report.
• Send a final adverse action notice if the decision stands.

Where to File Complaints in Vermont

• Wage and hour, final pay, earned sick time, family leave, workers' comp, mass layoffs: Vermont Department of Labor, Wage and Hour Program. Phone (802) 828-0267.
• Discrimination, harassment, retaliation, FEPA claims: Vermont Attorney General's Civil Rights Unit and Vermont Human Rights Commission.
• Pay transparency violations: Vermont Attorney General's Office.
• Federal employment discrimination (Title VII, ADA, ADEA, GINA, PWFA, EPA): Equal Employment Opportunity Commission, Boston Area Office.
• OSHA complaints (private sector): Vermont Occupational Safety and Health Administration (VOSHA), a state-plan OSHA agency.
• Wage claims under FLSA: U.S. Department of Labor, Wage and Hour Division.
• Union and labor practice issues: National Labor Relations Board, Boston Region.

How AllVoices Helps Vermont HR Teams Stay Compliant

AllVoices is an employee relations platform that handles the workflow most Vermont employers patch together with email, spreadsheets, and shared drives. Three areas where it most directly addresses Vermont compliance risk:

FEPA investigation defensibility. The Vermont Attorney General's Civil Rights Unit looks for "prompt and effective response" when assessing employer liability under § 495. That standard requires a documented record of intake, interviews, evidence preservation, findings, and corrective action. Vera AI inside AllVoices drafts intake summaries, suggests interview questions, and flags retaliation indicators. The output is a single complete investigation report per case.

Whistleblower and retaliation intake. Vermont protects a wide range of employee complaints under FEPA, the wage payment statutes, and the workers' compensation law. A documented internal grievance channel that is branded for the employer, available 24/7, and timestamped is the cleanest way to surface issues before they escalate to the Attorney General or Department of Labor.

Multi-leave coordination. A Vermont employer is running parental leave, family leave, short-term family leave, earned sick time, federal FMLA, and workers' compensation in parallel. AllVoices integrates with Workday, Rippling, Paylocity, BambooHR, and ADP so the case record stays connected to the employee record across systems and the leave designation does not get lost in email.

For a walk-through of how this looks day to day, see a demo of the platform.

Frequently Asked Questions

What is the Vermont minimum wage in 2026?

$14.42 per hour, effective January 1, 2026. The tipped employee base wage is $7.21 per hour. The Vermont minimum wage adjusts annually based on CPI-U with a 5% maximum increase and no decrease.

When does Vermont pay transparency apply?

July 1, 2025 onward. Employers with five or more employees and at least one Vermont-based worker must include wage ranges in written job advertisements. Commission positions disclose the commission structure. Tipped positions disclose the tipped nature plus the base wage or range.

Does Vermont require paid sick leave?

Yes. The Earned Sick Time Act provides one hour of paid sick time per 52 hours worked, capped at 40 hours per year. Most employees with a Vermont primary worksite qualify. New hires can be subject to up to a one-year waiting period before using accrued time.

When does Vermont's parental and family leave law apply?

The 12-week parental leave entitlement applies to employers with 10 or more employees who work an average of 30 hours per week. The 12-week family leave entitlement applies to employers with 15 or more employees. Short-term family leave (up to 24 hours per year) applies at the 10-employee threshold. Eligible employees must have worked an average of 30 hours per week for at least one year.

How quickly must final wages be paid in Vermont?

Within 72 hours for involuntary terminations (discharge or layoff). By the next regular payday for voluntary resignations. Late or unpaid wages trigger double damages plus costs and attorney's fees under 21 V.S.A. § 347.

Can Vermont employers ask about salary history?

No. 21 V.S.A. § 495m has prohibited salary history inquiries since July 1, 2018. Employers cannot ask the candidate, ask a former employer, or use compensation history as a screen. Voluntary disclosure can be confirmed only after an offer is extended.

Are non-compete agreements enforceable in Vermont?

Sometimes. Vermont has no comprehensive statute. Courts apply common-law reasonableness review. H.205 in the 2025-2026 session would prohibit nearly all non-competes; the bill is pending. Until then, narrow geography and duration, document a legitimate business interest, and provide consideration for any mid-employment restriction.

Can Vermont employers fire someone for off-duty cannabis use?

Generally no, for adults 21 and over. Vermont protects off-duty cannabis use outside the employer's property. On-duty use, possession, or impairment can be disciplined. Drug testing is heavily restricted: no random or company-wide tests except for federal compliance, probable cause required, no blood draws, and only non-therapeutic levels can be tested for cannabis.

The Bottom Line for Vermont HR Teams in 2026

Vermont's compliance footprint expanded materially in 2025. The 2026 priorities for Vermont HR teams:

• Immediately: update payroll for the $14.42/hour minimum and $7.21/hour tipped base wage effective January 1, 2026.
• Immediately: audit every active job posting for compliance with the pay transparency rule. Add wage ranges or appropriate disclosures.
• By Q2 2026: rewrite the leave policy to capture the Act 32 expansions: bereavement leave, safe leave, military qualifying exigency, and the broader family-member definition.
• By Q2 2026: retrain hiring managers on the salary history ban and on the new criminal history protected class under H.201.
• Throughout 2026: document workers' compensation late payments and submit the new quarterly report. Provide translation services for non-English-fluent injured workers.
• Throughout 2026: compare HR practices against the neighboring New Hampshire labor laws and Massachusetts labor laws guides if the company has cross-border employees.
• Ongoing: if H.205 advances, Vermont could become one of the most restrictive states in the country on non-compete agreements. Track and prepare to re-paper.

For HR leaders running employee relations in Vermont and across state lines, a single platform for case intake, investigation, and reporting is the difference between scrambling under audit and walking the auditor through the timeline.