Introduction to employment laws in Vermont
For businesses eyeing expansion or already operating in this northeast state, understanding and complying with Vermont employment laws is critical. Failure to comply can result in severe penalties and damage to the company’s reputation.
Vermont is governed by a complex patchwork of federal and state laws. Here’s everything you need to know.
Employing in Vermont: Key employment laws and practices
Standard work hours
In Vermont, full-time employment is typically considered as working between 30 and 40 hours per week. For contractual or self-employed professionals, work hours may vary based on the terms agreed upon in their contracts. Businesses should note that work timings must comply with all relevant federal and state laws, ensuring workers’ rights to breaks and rest periods are respected.
Minimum wage and overtime
Vermont’s current minimum wage for private-sector employees is $13.67 per hour. Businesses need to be vigilant about any upcoming changes in these rates to ensure continued compliance. Special rules may also apply to different sectors, like agriculture or hospitality, making it important to understand the nuances of wage laws specific to your industry.
As per the federal Fair Labor Standards Act (FLSA), non-exempt employees in Vermont are entitled to 1.5 times their regular pay rate for overtime work, i.e., work exceeding 40 hours in a week. The salary threshold for overtime exemption in Vermont is $684 per week, aligning with the federal minimum.
Insurance and benefits
Vermont businesses must comply with a few state-specific regulations regarding employee benefits. One is unemployment insurance. Another is workers’ compensation, which any employer of more than one individual must carry. For others, federal law applies or the provision of the benefits are left to the employers’ discretion.
Benefit | Requirement |
Health insurance | No state-specific law, but mandatory for businesses with 50+ full-time equivalent employees under federal provisions in the Affordable Care Act |
Dental and vision insurance | Optional, but commonly provided as part of employee benefits packages |
Retirement benefits (401k) | Optional, but commonly provided to help attract and retain talent |
State unemployment insurance | 0.4%-5.4%, taxable wage base of $14,300 |
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Meal and rest periods
In Vermont, employment laws dictate that employers provide their employees with reasonable opportunities during work hours to eat and rest. The state’s law also has a special provision for breaks for lactating mothers.
Aside from this, the state defaults to guidelines found in the FLSA regarding meals and breaks. Short rest breaks lasting about five to 20 minutes are considered compensable work hours. They are customarily paid and counted as part of the employee’s work hours. Meal breaks of 30 minutes or more do not have to be paid as long as the employee is relieved of all work-related duties for the duration.
Anti-discrimination laws
Vermont HR compliance involves strict adherence to anti-discrimination laws that protect workers from unfair treatment based on specific protected characteristics. Both federal and state-level laws prohibit discrimination in the workplace on grounds encompassing age, race, color, religion, sex (including pregnancy), national origin, disability, and genetic information.
In addition to these federally protected classes, Vermont law prohibits discrimination based on sexual orientation and gender identity. Employers cannot refuse to hire, dismiss, or discriminate against any individual due to these protected traits in terms of compensation, conditions, or privileges of employment. It’s important for employers to understand these protections and create inclusive environments that value diversity and uphold fair treatment principles.
Leave policies
Leave provisions in Vermont encompass sick leave, parental leave, bereavement leave, jury duty leave, and military leave, each with distinct state-specific requirements that employers must comply with.
No state statute in Vermont governs vacation leave provisions; however, employers commonly provide paid or unpaid vacation leave. It must be consistent with employment law and outlined in the Collective Bargaining Agreements.
Vermont mandates employers provide employees with paid sick leave, accruing at a rate of one hour for every 52 hours worked. State law also mandates employers offer up to 12 weeks of unpaid, job-protected parental leave for the birth or adoption of a child.
Vermont employees who are members of the U.S. armed forces reserves have the right to unpaid time off for military training, drills, encampment, naval cruises, and service under orders.
Leave type | Provision |
Vacation leave | Determined by employer |
Sick leave | One hour paid sick leave per 52 hours worked |
Bereavement leave | Determined by employer |
Jury duty leave | Unpaid |
Military leave | Unpaid |
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Termination laws
Regulations surrounding employee terminations in Vermont are guided by the at-will employment doctrine. Either party can end the employment relationship without giving either notice or reason, as long as it doesn’t violate any law (i.e. discrimination or retaliation).
However, in cases of mass dismissals or situations where an employment contract or collective bargaining agreement is in effect, different rules may apply. The terms of these agreements often mandate that termination can only occur for just cause, and they typically outline what constitutes just cause.
Safety and health
Vermont is committed to the safety and health of its workers, with regulations in place to ensure a safe and healthy work environment. Employers are required to comply with the Vermont Occupational Safety and Health Administration’s (VTOSHA) standards, which are designed to protect employees from workplace hazards.
Taxes in Vermont
Both employers and employees have specific tax obligations in Vermont. Employer payroll contributions range from 0.4% to 8.4% for Unemployment Insurance, 1% for new employer Unemployment, 6.2% for FICA Social Security, and 1.45% for FICA Medicare. On the other hand, employee payroll contributions include 6.2% for FICA Social Security and 1.45% for FICA Medicare.
The state income tax varies from 3.35% to 8.75%, depending on income brackets and filing status. Federal tax also applies with rates ranging from 10% to 37%, again based on income brackets and filing status.
| Tax type | Employer contribution | Employee contribution |
| Unemployment insurance | 0.4% – 8.4% | N/A |
| Unemployment (new employer) | 1% | N/A |
| FICA Social Security | 6.2% | 6.2% |
| FICA Medicare | 1.45% | 1.45% |
| State income tax | N/A | 3.35% – 8.75% |
| Federal income tax | N/A | Varies |
Managing Vermont employees with an Employer of Record (EOR)
Navigating the intricacies of Vermont employment laws can be an arduous task, especially when these rules are constantly evolving.
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FAQs
Full-time employment in Vermont is generally considered to be between 30 and 40 hours per week. Employers must adhere to the Fair Labor Standards Act (FLSA) for overtime pay considerations, paying non-exempt employees 1.5x their regular pay rate for any hours worked beyond the standard 40-hour workweek.
As per Vermont employment laws, the current minimum state wage for private sector employees is $13.67 per hour. Employers must ensure compliance with this regulation when setting salaries for their employees.
Vermont does not have specific statutes governing vacation time. The decision to offer paid or unpaid vacation leave is at the discretion of employers, but any such policy must comply with state employment laws and be stipulated in Collective Bargaining Agreements.
Generally, in Vermont, most employees are employed at-will, and either party can terminate the employment relationship without notice. However, it is common practice for employers to require a minimum of two weeks’ notice. In case of mass dismissals, employers must comply with the federal Worker Adjustment and Retraining Notification Act (WARN), which mandates a 60 days’ notice for impacted employees.
Vermont employment laws offer protections beyond federal requirements, including family and medical leave, accommodations for pregnancy, a higher state minimum wage, and provisions for paid sick leave. Employers must comply with both state and federal laws as well as any relevant local regulations that affect the employment relationship.
