Vermont Min Wage: A Guide to Changes and Impacts

Vermont's minimum wage has been increasing over the years, and it's essential to understand the changes and their impacts on workers and employers.

As of January 2022, the Vermont minimum wage is $12.55 per hour, with an annual increase of $0.50 per hour.

This change affects many workers, especially those in low-wage industries such as retail, food service, and hospitality.

In 2020, the Vermont minimum wage was $10.96 per hour, and it has been rising steadily since then.

The increase in minimum wage is expected to benefit approximately 64,000 workers in Vermont, according to a study by the Vermont Department of Labor.

Many small businesses and entrepreneurs are also affected by the minimum wage increase, which can impact their bottom line and hiring decisions.

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The Vermont Legislature is considering a minimum wage increase from $10.78 an hour to $15 an hour by 2024. Senate leaders have signaled a willingness to compromise on a more gradual timeline.

Recent studies suggest that raising the minimum wage could have significant effects on various jobs and regions in Vermont. This includes jobs that are already at or near the current minimum wage, which could be the most affected by an increase.

Business owners and others have been queried about the possible impact of a minimum wage increase, and their responses provide valuable insights into the potential effects. The data presented in a series of charts helps to illustrate which jobs and regions would be most affected.

A gradual timeline for the minimum wage increase could provide more time for businesses to adjust to the change. This could help mitigate the potential negative effects on certain jobs and regions.

In Vermont, the minimum wage rates vary across cities, but most cities have a minimum wage of $14.01 per hour for non-tipped employees. This includes cities like Burlington, South Burlington, and Rutland.

Here's a breakdown of the minimum wage rates for non-tipped employees in some of the major cities in Vermont:

As for exemptions, full-time high school students are exempt from paying minimum wages in Vermont, but they are still paid minimum wages under federal law.

Many business owners in Vermont say the minimum wage discussion doesn’t apply to them, because nobody in their company is making less than $15 now.

In the retail and hospitality industry, this isn't the case.

Cities in Vermont have their own minimum wage rates, which can be a bit confusing. The minimum wage and tipped minimum wage rates vary across different cities.

Burlington, South Burlington, and Rutland have the same minimum wage rate of $14.01 per hour for non-tipped employees. They also have the same tipped minimum wage rate of $7.01 per hour.

Other cities, such as Barre, Montpelier, and Winooski, also have the same minimum wage rate of $14.01 per hour for non-tipped employees. Their tipped minimum wage rate is also $7.01 per hour.

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Some cities, like Northfield and Waterbury, have a lower minimum wage rate of $13.67 per hour for non-tipped employees. However, their tipped minimum wage rate remains the same at $7.01 per hour.

Here's a list of some of the cities in Vermont and their corresponding minimum wage rates:

It's worth noting that some cities have the same minimum wage rate, while others have a slightly lower rate.

Exemptions from minimum wage laws in Vermont can be a bit tricky to navigate. Here are some key exemptions to keep in mind:

Full-time high school students are exempt from Vermont's minimum wage laws, but they are still paid the federal minimum wage.

Certain non-profit organizations are exempt from Vermont's minimum wage laws, but only if their employees are not nurses' aides or laundry workers.

Government employees who work under temporary, part-time, or volunteer arrangements may also be exempt from Vermont's minimum wage laws.

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Here are some specific categories of workers who are exempt from Vermont's minimum wage laws:

It's worth noting that some cities in Vermont have slightly different minimum wage rates, but most cities have a minimum wage of $14.01 per hour for non-tipped employees.

The minimum wage in Vermont is currently $14.01 per hour, which is significantly higher than the federal minimum wage of $7.25 per hour.

Employers with at least two employees must comply with Vermont's minimum wage law, which includes adjustments based on the Consumer Price Index (CPI) or a maximum increase of 5%, whichever is smaller.

If you're an employer in Vermont, you're required to display updated labor law posters in the workplace to comply with state posting requirements.

Tipped workers in Vermont must earn at least $14.01 per hour when combining hourly wages and tips. If tips don't bring total earnings to this amount, employers must make up the difference.

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To ensure compliance, it's essential to review employee classifications and pay rates regularly. Misclassifications can lead to unpaid wages or legal penalties.

Here's a breakdown of some worker categories and their applicable minimum wage rates:

Employers must ensure that exempt and non-exempt employees are properly categorized based on their specific job duties and salaries.

In Vermont, tipped employees are paid a base wage of $7.01 per hour as of January 1, 2025.

This rate is set at half the state's full minimum wage, and employers must ensure tipped workers still earn at least $14.01 per hour when wages and tips are combined.

If tips don't bring total earnings to that level, the employer is legally required to cover the difference.

Tipped employees in industries where tipping is customary and monthly tips exceed $120 fall under this rule. These industries include restaurants and bars, hotels, and event and hospitality services.

Common positions in these sectors that often rely on gratuity for a significant portion of their income include servers, bartenders, hosts, bellhops, valets, housekeepers, banquet staff, and coat check attendants.

Employers in these sectors must track both wages and tips carefully to ensure compliance, including maintaining accurate records and conducting regular reviews to confirm employees are meeting or exceeding the full minimum wage threshold.

Tracking legislative changes is crucial for employers in Vermont. Vermont adjusts its minimum wage annually, typically linked to the Consumer Price Index or a capped increase.

Employers should review adjustments each fall to prepare for new rates effective January 1. This helps ensure they're compliant with the latest regulations.

Subscribing to updates from the Vermont Department of Labor is a great way to stay ahead of changes. Automating compliance updates through HR software can also save time and reduce errors.

The federal minimum wage in Vermont was first set at $0.25 per hour in 1938.

Vermont introduced its own minimum wage in 1959, paying employees $1.00 per hour.

From 1959 to 2016, the state's minimum wage rates increased by an average of 4.6% per year.

However, when adjusted for inflation using the Consumer Price Index (CPI), the wage rates increased by an average of only 0.8% per year.

Here is a breakdown of the historical changes in the Minimum Wage Rates of Vermont:

The federal minimum wage has increased significantly over the years, with the most recent increase being to $13.18 in 2024.