Vermont Employment Law 2026

2.1 Wage and Hour Rights

Vermont law establishes comprehensive wage and hour protections for employees, often providing greater protections than federal law.

2.1.1 Minimum Wage (2026)

Current Vermont Minimum Wage:

According to Vermont Department of Labor announcement dated January 2026:

Effective January 1, 2026: $14.42 per hour for all hours worked

Source: Vermont Department of Labor
Citation: 21 V.S.A. § 384(a)(1)
Official announcement: https://labor.vermont.gov/press-release/vermont-department-labor-announces-minimum-wage-increase-starting-january-2026
Official statute: https://legislature.vermont.gov/statutes/section/21/005/00384
Last amended: 2025

Annual Adjustment Mechanism:

According to 21 V.S.A. § 384(a)(1):

“Beginning on January 1, 2022, an employer shall not employ any employee at a rate of less than $12.55, and on each subsequent January 1, the minimum wage rate shall be increased by five percent or the percentage increase of the Consumer Price Index, CPI-U, U.S. city average, not seasonally adjusted, or successor index, as calculated by the U.S. Department of Labor or successor agency, rounded to one decimal point, for the 12 months preceding the previous September 1, whichever is smaller, but in no event shall the minimum wage be decreased.”

Source: Vermont Statutes Annotated
Citation: 21 V.S.A. § 384(a)(1)
Official text: https://legislature.vermont.gov/statutes/section/21/005/00384

Vermont’s minimum wage is indexed to inflation and automatically adjusts each January 1 based on the Consumer Price Index. The increase is limited to the lesser of 5% or the CPI increase, ensuring the minimum wage keeps pace with cost of living.

Federal Minimum Wage:

The federal minimum wage under the Fair Labor Standards Act is $7.25 per hour. Vermont’s minimum wage is significantly higher, so Vermont’s rate applies to Vermont employees.

Source: Fair Labor Standards Act, 29 U.S.C. § 206
DOL information: https://www.dol.gov/agencies/whd/minimum-wage

2.1.2 Tipped Employees

Tipped Minimum Wage (2026):

According to 21 V.S.A. § 384(a)(2) and Vermont Department of Labor:

Effective January 1, 2026: $7.21 per hour for tipped employees

Source: Vermont Department of Labor
Citation: 21 V.S.A. § 384(a)(2)
Official announcement: https://labor.vermont.gov/press-release/vermont-department-labor-announces-minimum-wage-increase-starting-january-2026

Definition of Tipped Employee:

According to 21 V.S.A. § 384(a)(2):

“An employer in the hotel, motel, tourist place, and restaurant industry shall not employ a service or tipped employee at a basic wage rate less than one-half the minimum wage. As used in this subdivision, ‘a service or tipped employee’ means an employee of a hotel, motel, tourist place, or restaurant who customarily and regularly receives more than $120.00 per month in tips for direct and personal customer service.”

Source: Vermont Statutes Annotated
Citation: 21 V.S.A. § 384(a)(2)
Official text: https://legislature.vermont.gov/statutes/section/21/005/00384

Tip Credit Requirements:

The tipped minimum wage equals 50% of the full minimum wage. When an employee’s tips combined with the tipped minimum wage do not equal the full minimum wage rate, the employer is required to pay the difference.

According to Vermont Department of Labor:

“The State’s tipped minimum wage law allows employers to pay a lower hourly rate, as long as the employee receives tips equal to, or greater than, the standard minimum wage during a given shift. In cases where the employee does not receive enough in tips during a workweek to equal the standard minimum wage per hour, the employer is required to pay the difference in order to ensure the tipped wage employee is compensated at the non-tipped minimum wage amount.”

Source: Vermont Department of Labor
Published: January 2026
Available at: https://labor.vermont.gov/press-release/vermont-department-labor-announces-minimum-wage-increase-starting-january-2026

Tip Retention:

According to federal law (Fair Labor Standards Act Section 3(m)), employees must retain all tips received, except for valid tip pooling arrangements. Employers cannot require employees to share tips with the employer.

Source: Fair Labor Standards Act, 29 U.S.C. § 203(m)
DOL guidance: https://www.dol.gov/agencies/whd/flsa

2.1.3 Overtime Requirements

Vermont Overtime Law:

According to 21 V.S.A. § 384(b):

“Notwithstanding subsection (a) of this section, an employer shall not pay an employee less than one and one-half times the regular wage rate for any work done by the employee in excess of 40 hours during a workweek.”

Source: Vermont Statutes Annotated
Citation: 21 V.S.A. § 384(b)
Official text: https://legislature.vermont.gov/statutes/section/21/005/00384

Overtime Threshold: 40 hours per workweek
Overtime Rate: 1.5 times the regular wage rate
No Daily Overtime: Vermont law does not require overtime pay for working more than 8 hours in a day (unlike California and some other states)

Exemptions from Vermont Overtime:

According to 21 V.S.A. § 384(b), Vermont’s overtime law does not apply to:

1. Employees of retail or service establishments (75% of sales not for resale)
2. Employees of amusement or recreational establishments operating 7 months or less per year
3. Employees of hotels, motels, or restaurants
4. Employees of hospitals, nursing homes, and similar facilities (under certain conditions)
5. Employees in transportation businesses not covered by federal overtime
6. Employees of political subdivisions of Vermont
7. State employees covered by FLSA
8. Permanent employees of Vermont General Assembly

Source: Vermont Statutes Annotated
Citation: 21 V.S.A. § 384(b)
Official text: https://legislature.vermont.gov/statutes/section/21/005/00384

Federal Overtime Law:

Federal law under the Fair Labor Standards Act also requires overtime at 1.5 times the regular rate for hours worked over 40 per week for non-exempt employees.

Source: Fair Labor Standards Act, 29 U.S.C. § 207
Official text: https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section207
DOL guidance: https://www.dol.gov/agencies/whd/overtime

Important Note: Many employees are exempt from overtime requirements under federal law based on job duties and salary level. Federal exemptions apply regardless of Vermont’s overtime law. Employers must comply with both state and federal law.

2.1.4 Meal and Rest Break Requirements

Vermont Meal and Rest Break Law:

Vermont law does not mandate meal or rest breaks for adult employees in most industries.

Search Verification:

• Vermont Legislature website searched: https://legislature.vermont.gov/
• Search terms: “meal break”, “rest break”, “employee breaks”
• Date: January 21, 2026
• Result: No Vermont statute requiring meal or rest breaks for adult employees in private employment

Federal Law:

Federal law under the Fair Labor Standards Act does not require meal or rest breaks for adult employees.

According to U.S. Department of Labor:

“Federal law does not require lunch or coffee breaks. However, when employers do offer short breaks (usually lasting about 5 to 20 minutes), federal law considers the breaks as compensable work hours that would be included in the sum of hours worked during the work week and considered in determining if overtime was worked.”

Source: U.S. Department of Labor, Wage and Hour Division
Available at: https://www.dol.gov/general/topic/workhours/breaks

Employer Policies:

While Vermont law does not require breaks, many employers provide meal and rest breaks as a matter of policy or under collective bargaining agreements. If an employer provides breaks:

• Short breaks (5-20 minutes) are typically paid work time under federal law
• Meal breaks (30 minutes or more) may be unpaid if employee is completely relieved of duties

2.1.5 Earned Sick Time

Vermont Earned Sick Time Law:

Vermont mandates earned sick time for employees working an average of 18 hours or more per week.

Accrual Rate:

According to 21 V.S.A. § 482(a):

“An employee shall accrue not less than one hour of earned sick time for every 52 hours worked.”

Source: Vermont Statutes Annotated
Citation: 21 V.S.A. § 482(a)
Official text: https://legislature.vermont.gov/statutes/section/21/005/00482
Effective: January 1, 2017

Key Provisions:

Waiting Period: Employers may require a waiting period of up to one year for newly hired employees. During the waiting period, employees accrue sick time but cannot use it until completing the waiting period.

Accrual Cap: Employers may limit accrual to 40 hours in a 12-month period.

Use of Earned Sick Time:

According to 21 V.S.A. § 483, earned sick time may be used for:

1. Employee’s own illness, injury, or health condition
2. Employee’s medical care, diagnosis, or preventive care
3. Care for employee’s family member with illness, injury, or health condition
4. Care or assistance for family member’s medical care
5. Arranging for long-term care for family member

Source: Vermont Statutes Annotated
Citation: 21 V.S.A. § 483
Official text: https://legislature.vermont.gov/statutes/section/21/005/00483

Compensation Rate:

Earned sick time must be compensated at the greater of:

• Employee’s normal hourly wage rate, or
• The minimum wage

Covered Employers: All Vermont employers with employees working an average of 18 hours or more per week

Source: 21 V.S.A. § 481(1) and § 481(5)
Official text: https://legislature.vermont.gov/statutes/section/21/005/00481

Note: Federal law does not mandate paid sick leave for private sector employees. Vermont’s earned sick time requirement exceeds federal standards.

2.1.6 Wage Payment Requirements

Pay Frequency:

Vermont law does not mandate a specific pay frequency (weekly, biweekly, semi-monthly, or monthly). Payment frequency is determined by employer policy or agreement with employees.

Final Paycheck Upon Termination:

According to 21 V.S.A. § 342:

Employers are required to pay all wages due to terminated or resigned employees on the next regular payday following termination, or within 72 hours after termination if the employee requests payment earlier.

Source: Vermont Statutes Annotated
Citation: 21 V.S.A. § 342
Official text: https://legislature.vermont.gov/statutes/section/21/005/00342
Last amended: 2024

Wage Deductions:

Vermont law restricts permissible deductions from employee wages. Employers may deduct:

• Amounts required by law (taxes, court orders)
• Amounts authorized in writing by the employee for the employee’s benefit
• Amounts for board, lodging, apparel, rent, utilities, or similar items furnished by employer (per 21 V.S.A. § 384(c))

Source: 21 V.S.A. § 342 and § 384(c)

Recordkeeping:

According to 21 V.S.A. § 393:

“Every employer shall keep a true and accurate record of the hours worked by each employee and of the wages paid to the employee.”

Employers are required to maintain wage records for at least two years and provide them to the Commissioner of Labor upon request.

Source: Vermont Statutes Annotated
Citation: 21 V.S.A. § 393
Official text: https://legislature.vermont.gov/statutes/section/21/005/00393

2.1.7 Summary of Employee Wage Rights

Vermont Employee Rights:

Vermont employees have the right to:

• Receive at least $14.42 per hour for all hours worked (2026 minimum wage)
• Receive overtime pay at 1.5 times regular rate for hours over 40 per week (unless the position is exempt)
• Accrue and use earned sick time (1 hour per 52 hours worked)
• Receive final paycheck within 72 hours of termination if requested
• Receive accurate wage statements
• File wage complaints if not paid properly

Vermont Employer Obligations:

Vermont employers are required to:

• Pay at least the Vermont minimum wage ($14.42/hour in 2026)
• Pay overtime at 1.5 times the regular rate for non-exempt employees working over 40 hours per week
• Provide earned sick time accrual to employees working 18+ hours per week on average
• Pay final wages timely upon termination
• Maintain accurate payroll records for at least two years
• Post required wage and hour notices in the workplace

2.2 Parental and Family Leave

Vermont provides comprehensive parental and family leave protections that often exceed federal requirements.

2.2.1 Vermont Parental and Family Leave Act

Covered Employers:

According to 21 V.S.A. § 471(1):

“‘Employer’ means an individual, organization, or governmental body, partnership, association, corporation, legal representative, trustee, receiver, trustee in bankruptcy, and any common carrier by rail, motor, water, air, or express company doing business in or operating within this State that for the purposes of parental leave employs 10 or more individuals who are employed for an average of at least 30 hours per week during a year and for the purposes of family leave employs 15 or more individuals for an average of at least 30 hours per week during a year.”

Source: Vermont Statutes Annotated
Citation: 21 V.S.A. § 471(1)
Official text: https://legislature.vermont.gov/statutes/section/21/005/00471

Coverage Thresholds:

• Parental leave: Employers with 10+ employees working 30+ hours/week
• Family leave: Employers with 15+ employees working 30+ hours/week

Eligible Employees:

According to 21 V.S.A. § 471(2):

“‘Employee’ means a person who, in consideration of direct or indirect gain or profit, has been continuously employed by the same employer for a period of one year for an average of at least 30 hours per week.”

Source: Vermont Statutes Annotated
Citation: 21 V.S.A. § 471(2)
Official text: https://legislature.vermont.gov/statutes/section/21/005/00471

Employees must have worked for the employer for one year, averaging 30+ hours per week, to be eligible.

2.2.2 Leave Entitlements

Amount of Leave:

According to 21 V.S.A. § 472(a)(1):

“During any 12-month period, an employee shall be entitled to take unpaid leave for a period not to exceed 12 weeks” for:

(A) Parental leave following birth or adoption (B) Family leave for serious health condition of the employee (C) Family leave for serious health condition of a family member (D) Safe leave due to domestic violence, sexual assault, or stalking (E) Short-notice qualifying exigency arising from family member’s military service

Source: Vermont Statutes Annotated
Citation: 21 V.S.A. § 472(a)(1)
Official text: https://legislature.vermont.gov/statutes/section/21/005/00472

Bereavement Leave:

According to 21 V.S.A. § 472(a)(2):

“During any 12-month period, an employee may use up to two weeks out of the 12 weeks of leave available pursuant to subdivision (1) of this subsection for bereavement leave, with not more than five workdays to be taken consecutively.”

Source: Vermont Statutes Annotated
Citation: 21 V.S.A. § 472(a)(2)

Definition of Family Member:

According to 21 V.S.A. § 471(7), “family member” includes:

• Employee’s child, stepchild, foster child, ward
• Employee’s parent, stepparent, parent-in-law, grandparent, grandchild
• Employee’s spouse or domestic partner
• Employee’s sibling

Source: Vermont Statutes Annotated
Citation: 21 V.S.A. § 471(7)
Official text: https://legislature.vermont.gov/statutes/section/21/005/00471

2.2.3 Leave Protections

Employment and Benefits Protection:

According to 21 V.S.A. § 472(c) and (d):

During leave:

• Employer must continue employment benefits at the same level as if employee continued working
• Employee may use accrued paid leave (sick, vacation) or disability insurance, but such use does not extend the 12-week leave period

Upon return from leave:

• Employee must be restored to the same or equivalent position with equivalent employment benefits, pay, and terms and conditions of employment

Source: Vermont Statutes Annotated
Citation: 21 V.S.A. § 472(c) and (d)
Official text: https://legislature.vermont.gov/statutes/section/21/005/00472

Notice Requirements:

According to 21 V.S.A. § 472(e):

Employees must give reasonable written notice of intent to take leave, including:

• Date leave is expected to commence
• Estimated duration of leave

For birth or adoption: Employer cannot require notice more than 6 weeks before anticipated leave commencement

For unanticipated needs: Employee must give notice as soon as practicable

Source: Vermont Statutes Annotated
Citation: 21 V.S.A. § 472(e)

2.2.4 Short-Term Family Leave

In addition to the 12-week parental/family leave, Vermont provides short-term family leave for school and medical appointments.

According to 21 V.S.A. § 472a(a):

“An employee shall be entitled to take unpaid leave not to exceed four hours in any 30-day period and not to exceed 24 hours in any 12-month period” for:

1. Participating in preschool or school activities related to family member’s education
2. Attending or accompanying family member to routine medical or dental appointments
3. Accompanying family member to appointments for professional services related to their care
4. Responding to medical emergency involving family member

Source: Vermont Statutes Annotated
Citation: 21 V.S.A. § 472a(a)
Official text: https://legislature.vermont.gov/statutes/section/21/005/00472A
Effective: May 13, 2025 (as amended)

Notice: Employees must provide earliest possible notice, but no later than 7 days before leave, except in emergencies.

2.2.5 Federal Family and Medical Leave Act (FMLA)

Federal FMLA provides up to 12 weeks of unpaid leave for covered employees. Vermont employees may be covered by both Vermont and federal leave laws.

Federal FMLA Coverage:

• Employers with 50+ employees
• Employee worked 1,250 hours in past 12 months
• Employee worked for employer for 12 months

Source: Family and Medical Leave Act, 29 U.S.C. § 2611
DOL information: https://www.dol.gov/agencies/whd/fmla

Vermont law often provides broader coverage (smaller employers, more family members) than federal FMLA.