Follow us on LinkedIn to see future News.
September 3, 2025
Effective July 1, 2025, Vermont amended its compensation laws to, among other things, clarify its formula for calculating minimum wage and the penalties applicable to employers for unpaid wage violations. See 2025 Vt. S. 117. This article summarizes some of the key changes.
If the Commissioner of Labor determines that an employer willfully withheld unpaid wages, the order for collection shall (previously, the statute said “may”) provide that the employer is liable to pay an additional amount not to exceed twice the amount of unpaid wages. One-half of the additional amount shall be remitted to the employee and one-half shall be retained by the Commissioner of Labor to offset administrative and collection costs.
Beginning January 1, 2022, Vermont set its minimum wage rate at $12.55. On each subsequent January 1, the minimum wage rate has increased by five percent or the percentage increase of the Consumer Price Index (or its successor) and now will be rounded to one decimal point.
The amendments removed the authority of the Commissioner of Labor to recommend a subminimum wage for individuals with disabilities, learners, and apprentices.
Unemployment compensation claimants and employers now have the option to receive communications about unemployment insurance claims electronically.
The amendments mandate that if, upon the acquisition of a Vermont employer, a successor entity divides the operations of the business, the successor shall designate one of the corporate entities as the filing successor for unemployment insurance purposes.
The amendments update deadlines for the establishment of a modernized information technology system for the unemployment insurance program (the deadline now is July 1, 2026; previously, July 1, 2025) and provides for the resumption of the Short-Time Compensation Program.[1]
Workers’ compensation claimants may request medical case management services and, for claimants who do not speak English fluently, to receive translation services.
The amendments provide for enhanced penalties for the late payment of weekly benefits to workers’ compensation claimants. Previously, Vermont law required employers to pay a late fee to claimants equal to the greater of $10.00 or five percent of the benefit amount. Now, if a benefit payment is not mailed or deposited on the day established for payment, the employer shall pay to the claimant a late fee equal to the greater of $10.00 or: (a) five percent of the benefit amount for the first late payment; (b) 10 percent of the benefit amount for the second late payment; and (c) 15 percent of the benefit amount for the third and any subsequent late payments.
Employers must report late payments to the Department of Labor, and the Department of Labor must compile that data and submit a written report to the General Assembly by January 15, 2027.
Vermont Employers: These amendments require a lot of unpacking. Seek counsel to ensure that you are compliant.
The author of this article, Patricia Tsipras, is a member of the Bar of Pennsylvania. This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice in Pennsylvania, Vermont, or any other jurisdiction, nor does it establish an attorney-client relationship with any reader of the article where one does not exist. Always consult an attorney with specific legal issues.
[1] Vermont’s Short-Time Compensation program offers employers an alternative to layoffs during reduced business activity by reducing employee hours instead. Employees with reduced hours receive partial unemployment benefits to supplement their lost wages, helping them maintain their jobs and benefits while avoiding full unemployment.
