Nobody ever said running a business was easy. As an employer, you have many things to handle, and compliance is just one of them.
In addition to federal regulations, each state has its own share of employment-related laws that business owners need to be aware of. Here, we’re highlighting some of these key state-specific requirements, and offering guidance to help you keep up.
Bear in mind that this list is not comprehensive, and there may be local or industry-specific employment requirements that your business needs to comply with. It’s best to consult with counsel to ensure compliance with all applicable laws, as Justworks does not provide legal advice.
Payroll Tax Accounts
Because Justworks reports Vermont unemployment taxes on behalf of customers who utilize Justworks’ PEO services, Justworks may need to collect account information such as your account number and current rate. You can read more about it here: State Unemployment Insurance.
Recruiting & Hiring Practices
Salary History Inquiries
Vermont employers are prohibited from asking job applicants about their current or prior compensation, including current or past salary or wages and benefits, during the hiring process.
Mineral*: Vermont Pay Equity and Transparency
Ban-the-Box
Vermont employers are prohibited from inquiring about a job applicant’s criminal history on its initial employment application form subject to several exceptions. An employer in Vermont may inquire about the job applicant’s criminal history during an interview or after the applicant has otherwise qualified for the position.
Mineral*: Vermont Applicant and Employee Screening
Drug Testing
Vermont allows employers to drug test job applicants only after a conditional offer of employment has been made and so long as additional conditions are met. The state also allows employers to drug test current employees if probable cause exists, however, random testing is completely prohibited. While marijuana has been legalized for recreational use in the state, employers may still prohibit the use and presence of marijuana in the workplace.
Vermont Office of the Attorney General (OAG): Guide to Vermont’s Laws on Marijuana in the Workplace
Mineral*: Vermont Drugs, Alcohol, and Smoking
Independent Contractors
When classifying workers as employees or independent contractors, there are a few things to consider, including the different tests that apply under federal and Vermont employment laws, and potential penalties and other liabilities for misclassifying employees as independent contractors. Certain state laws apply tests that are more stringent than the guidance provided by federal agencies to apply in conjunction with federal laws.
You can read our general Help Center article on contractors, and view additional information on how to determine if someone is a contractor or employee in Vermont through the relevant link below. Specifically highlighted is the stringent “ABC” test which is used to classify workers in the state of Vermont.
Vermont Department of Labor (DOL): Employee vs Independent Contractor
Mineral*: Vermont Independent Contractors
Pay Requirements
Minimum Wage & Overtime
Vermont has minimum wage requirements in excess of the federal minimum wage. The Vermont minimum wage law covers employers with at least 2 employees, although some exceptions for certain individuals and/or professions apply.
Overtime requirements are generally in line with federal overtime requirements.
Vermont DOL: Workplace Rights & Wages
Mineral*: Vermont Minimum Wage and Overtime
Rest Breaks
Most employees in Vermont must be provided with reasonable opportunities during work hours for meals and breaks. Federal law requires a meal/lunch period to be counted as hours-worked and therefore paid unless it lasts 30- minutes or more and the employee is completely uninterrupted during the break period.
Mineral*: Vermont Meal and Rest Breaks
Pay Parity
Vermont prohibits all employers from paying different rates to members of protected classes (e.g. sex, race, national origin, sexual orientation, gender identity, or disability) for equal work that requires equal skill, effort, and responsibility, and is performed under similar working conditions. Notably, there may be certain exceptions to this prohibition where the difference is based on specific non-protected factors.
Mineral*: Vermont Pay Equity and Transparency
Lactation Breaks
Vermont employers are required to provide accommodations for nursing employees through reasonable paid or unpaid time throughout the workday to express breast milk for their nursing children for up to three years after the child's birth. The employer must also provide an appropriate private space that is not a bathroom stall.
Vermont Department of Health & Human Services (DHHS): Vermont Workplaces Support
Mineral*: Vermont Lactation Accommodation
Benefit Requirements
State Retirement Program
VT Saves is Vermont’s forthcoming program designed to give employees access to a retirement savings plan when their employer does not offer an employer-sponsored plan meeting the minimum standards. This program is expected to launch in 2025. You can read more about state retirement programs at the link below.
Healthcare Fund Contributions
Employers with more than 4 full-time equivalent employees working in Vermont are subject to a quarterly fee for all uncovered employees who do not have qualifying coverage, as defined by the requirements linked below.
As part of this requirement, employers must annually collect a signed Form HC-2, Declaration of Health Care Coverage from each Vermont employee who declines employer-sponsored coverage. If an employee does not return the signed form, the employer must assume they are uncovered. If an employee’s health coverage changes during the year, they must complete and submit a new form to their employer. Employers are also required to provide employees with an annual statement of premium amounts, employee and employer shares of the premium, and other employer contribution information.
Mineral*: Vermont Healthcare Fund Contribution
Leave
Parental and Family Leave
Vermont’s Parental Leave law requirements cover employers with at least 10 employees working an average of 30-hours per week over a 12-month period. Eligible workers are entitled to unpaid parental leave for up to 12 weeks during a 12-month period.
Vermont’s Family Leave Law requirements cover employers with at least 15 employees where the employee worked an average of 30-hours per week over a 12-month period. Eligible workers are entitled to unpaid family leave up to 12 weeks during a 12 month period for the serious illness of the worker or their child/stepchild, spouse, partner via civil union, parent or spouse’s parent. In addition, eligible employees are entitled to take unpaid short-term family leave of up to four hours in any 30-day period, not to exceed 24 hours in any 12-month period.
Vermont DOL: Parental Leave, Family Leave, and Short-Term Family Leave
Mineral*: Vermont Family and Medical Leave
Pregnancy Accommodations
A Vermont employee with a pregnancy-related condition has the right to reasonable accommodations in the workplace. A pregnancy-related condition is one caused by pregnancy, childbirth, or a medical condition related to pregnancy or childbirth.
Vermont DOL: Accommodations for Pregnant Employees In Vermont
Paid Sick and Safe Leave
Under Vermont’s Earned Sick Time law (VESTL), all employers must allow for accrual and use of at least 40 hours of paid sick leave per year for their employees to address personal and family needs with some exemptions. Employers must display a notice for employees to view where they are likely to see it and in languages spoken by such employees that details employee rights under this law.
Vermont DOL: Vermont Earned Sick Time FAQ
Mineral*: Vermont Sick Leave
Crime Victim Leave
Crime victim status is a protected category under Vermont’s Fair Employment Practices Act. In Vermont, employees who are crime victims, and have been continuously employed by the same employer for at least 6-months at an average of at least 20-hours worked per week, must be allowed to take unpaid leave to attend certain criminal proceedings and/or hearings.
Vermont Commission on Women: Crime Victim Status | Workplaces For All
Mineral*: Vermont Victim Leave
Harassment and Discrimination
In addition to protections under Federal law, Vermont law prohibits employment discrimination based on membership in any protected class to include race, color, religion, ancestry, national origin, sex, sexual orientation, gender identity, place of birth, crime victim status, age or disability by employers covered under Vermont’'s anti-discrimination laws, such as the Vermont Fair Employment Practices Act (FEPA).
Vermont Commission on Women: Employer Responsibilities | Workplaces For All
Mineral*: Vermont Employment Discrimination and Accommodations
Separation
If you'd like to know how to separate an employee in Justworks, please visit our Help Center resource on Terminating Employees.
In Vermont, final pay must be provided to a separated employee within 72 hours, if the termination is involuntary. For a voluntary separation, the final paycheck can be issued on the next regularly scheduled payday or where none exists on the following Friday.
Vermont does not require that vacation or PTO be paid out upon separation. Employers should review their internal policies to determine if payout is required.
Vermont DOL: A Summary of Vermont Wage and Hour Laws
Mineral*: Vermont Separation
Business Closings and Layoffs
The Federal WARN Act imposes certain notices and other obligations on covered businesses before conducting large-scale business closures, layoffs, or relocations.
Vermont’s Notice of Potential Layoffs Act additionally requires all employers who are closing or conducting mass layoffs of 50 or more employees over 90-days to notify the Secretary of Commerce and Community Development and the Commissioner of Labor at least 45-days in advance of the closing or layoff date. Additionally, employers are required to provide a 30-day notice to all local and chief elected officials or administrative offices, municipalities and any bargaining unit.
In specific circumstances, employers must also submit a Mass Separation Spreadsheet to the Unemployment Insurance Program.
Vermont DOL: WARN Act and Notice of Potential Layoffs Act
Vermont DOL: Mass Separation Spreadsheet - Template
Vermont DOL: Mass Layoff or Separation
Mineral*: Vermont Layoffs
Note
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Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.