Vermont Labor Law Guide 2026: Minimum Wage, Overtime, Breaks, and Leave

Vermont regulates more of the employment relationship than most small states. It has an indexed minimum wage, a state overtime law with unusual industry exemptions, a mandatory Earned Sick Time law, weekly pay as the default, and a 72-hour deadline for final pay after discharge. The Wage and Hour Program of the Vermont Department of Labor enforces these rules, and where state and federal law differ, "the law providing greater employee protection is the law to which the employer must adhere."

This guide covers what employers in Burlington, Montpelier, and across the state must follow in 2026.

Minimum Wage in Vermont

Vermont's minimum wage is $14.42 per hour for 2026, up from $14.01 in 2025, and the tipped cash wage is $7.21. The Department of Labor's wage and hour page explains that the rate "is adjusted annually to be effective on January 1," and the Department announces the next year's figure in the autumn. The Vermont minimum wage law covers employers with two or more employees; full-time high school students are exempt from the state rate but may still be covered federally.

The Vermont minimum wage guide covers the indexing formula, tipped rules, and earnings at the minimum. See minimum wage by state for the national table.

Overtime Rules

Vermont's overtime law covers employers with two or more employees and requires "at least one and one-half times the regular wage rate" for hours over 40 in a workweek. The Department's summary of wage and hour laws lists industries exempt from state overtime: employees of retail or service establishments, amusement or recreational establishments (with restrictions), hotels, motels, and restaurants, hospitals, nursing homes, and residential care facilities (with restrictions), certain transportation businesses, and political subdivisions. The summary adds a warning: "even if exempt from overtime under state law, an employee covered by the FLSA may still be entitled to overtime." In practice, a Vermont retail or restaurant employer usually still owes federal overtime.

Overtime is computed on a single workweek; averaging across weeks is not permitted. Vermont has no daily overtime rule and no provision for comp time in lieu of overtime.

Worked example at the minimum wage. A $14.42 employee who works 45 hours earns 40 × $14.42 = $576.80 plus 5 × $21.63 = $108.15 in overtime, for $684.95 gross. Use the overtime calculator and see overtime pay laws by state.

Meal and Rest Breaks

Vermont's rule is a standard rather than a schedule. Under 21 V.S.A. 304, an employer "must provide its employees with 'reasonable opportunity' to eat and use toilet facilities in order to protect the health and hygiene of the employee." The statute sets no minimum length or timing. Federal rules decide pay: a meal period counts as hours worked "unless the lunch period lasts at least thirty minutes and the employee is completely uninterrupted and free from work."

Break type	Vermont requirement	Notes
Meal break	Reasonable opportunity to eat	Unpaid only if 30 minutes or more and fully duty-free
Rest break	Reasonable opportunity to use the restroom	Short breaks are paid
Nursing mothers	Reasonable time and private space, not a bathroom stall, for three years after birth	Pay at employer discretion unless a contract says otherwise

See rest and meal break laws by state and the break time calculator.

Paid Sick Leave and Other Leave

Vermont's Earned Sick Time Act has applied to nearly all employers since 2018. The Department's Earned Sick Time FAQ sets the accrual at "1 hour per 52 hours worked," capped at "40 hours per year." Employers may impose a waiting period of "up to 1 year" for new hires, during which time accrues but cannot be used. Excluded employees include those "under 18 years old," those working "fewer than 18 hours per week" on average, those employed "fewer than 20 weeks per year," and per diem healthcare workers. Employers are not required to pay out unused sick time at separation, and sick time is paid on the regular payroll schedule at the regular rate.

Leave type	Vermont requirement	Notes
Earned sick time	1 hour per 52 hours worked, up to 40 hours a year	Waiting period up to one year; carryover with a 40-hour cap
Parental and family leave	Vermont Parental and Family Leave Act: 12 weeks unpaid parental leave (10 or more employees) and family leave (15 or more), expanded by Act 32 of 2025	Confirm thresholds on the Department's Act 32 page
Short-term family leave	Up to 4 hours in a 30-day period for appointments and school activities (15 or more employees)	Unpaid
Jury duty	Job protected	No pay requirement
Town meeting	Unpaid leave to attend annual town meeting on request	Statutory
Military leave	Federal USERRA plus state protections	Reinstatement rights

See paid sick leave laws in the US and jury duty laws in the US.

PTO Payout and Final Paychecks

The Department's wage and hour summary states the deadlines: "If the employer discharges an employee, the employee must be paid within 72 hours from the time of discharge. An employee who voluntarily leaves an employment position shall be paid on the last regular payday, or if there is no regular payday, on the following Friday."

Pay frequency is weekly by default. "Employers must pay employees on a weekly basis. However, after providing written notice to its employees, an employer may issue paychecks on a bi-weekly or semi-monthly basis. Payday shall be within six (6) days of the last day of the pay period." Every payment must come with a wage statement showing total hours, hourly rate, gross pay, and itemized deductions.

Vermont has no statute requiring payout of unused vacation; the employer's written policy governs, and a promised payout is enforceable. See PTO payout laws by state.

Exempt vs Non-Exempt Employees

Vermont uses the federal executive, administrative, and professional exemptions and the $684 weekly salary threshold. The state adds industry exemptions from its own overtime law, but those do not remove FLSA overtime rights, so classify each role under both laws. A retail assistant manager paid a salary below $684 is non-exempt federally even though Vermont's overtime law exempts retail employees.

Use the FLSA exemption flowchart and read exempt vs non-exempt employees.

Child Labor Rules

The Department's employer information sheet on child labor (WH-30) confirms that employment certificates "are not required for the employment of minors in the state of Vermont" unless the minor is under 16 and employed during school hours. Proof of age must be kept on file for all minors under 18.

Age group	Vermont rules
Under 14	Generally prohibited outside parental employment, agriculture, and entertainment
14 and 15	Not during school hours; not before 7 AM or after 7 PM (9 PM from June 1 through Labor Day); no more than 3 hours on a school day, 18 in a school week, 8 on a non-school day, 40 in a non-school week
16 and 17	Federal hazardous occupation orders apply; the state summary caps work at 9 hours a day and 50 a week in certain settings, so confirm the current rule for your industry
Certificates	Only for minors under 16 working during school hours

Federal rules are in child labor laws in the US.

Other Vermont Employment Rules

• Wage statements. Every paycheck must show hours, rate, gross pay, and each deduction.
• Deductions. Only lawful deductions and those the employee voluntarily consents to in writing, and never below the minimum wage.
• Drug testing. Applicants must receive written notice of the drugs tested for and the procedure before a pre-employment test; random testing of employees is restricted.
• Pay transparency. Act 155 requires wage or salary ranges in job advertisements for employers with five or more employees, effective July 1, 2025. Confirm scope on the Department's site.
• Record-keeping. Vermont requires employers to keep hours and wage records for two years; federal law requires payroll records for three.
• Non-competes. Vermont has no broad ban, but confirm current legislation before using them for hourly staff.

Hiring, Termination, and Record-Keeping

Vermont is an at-will state. The Vermont Fair Employment Practices Act covers all employers and prohibits discrimination based on race, color, religion, national origin, sex, sexual orientation, gender identity, ancestry, place of birth, age, disability, HIV status, and crime victim status; it is enforced by the Attorney General's Civil Rights Unit and the Human Rights Commission. Federal Title VII applies at 15 or more employees. Complete Form I-9 for every hire and follow the Fair Credit Reporting Act for background checks.

Required posters include the Vermont minimum wage, Earned Sick Time, Parental and Family Leave, child labor, workers' compensation, and unemployment notices, plus the federal FLSA, OSHA, EEOC, FMLA, and USERRA posters. The Department publishes a mandatory posters packet.

A time card calculator totals a week; the timekeeping policy template documents break, overtime, and sick time rules.

Common Compliance Mistakes in Vermont

• Paying biweekly without written notice. Weekly pay is the default. Switching to biweekly or semimonthly is allowed only after written notice to employees, and payday must fall within six days of the period end.
• Treating retail overtime exemption as complete. The state exemption for retail, restaurant, and hotel employees does not remove federal overtime rights for FLSA-covered employers.
• Denying sick time to part-timers. The 18-hour threshold is an average; an employee who averages 18 or more hours a week is covered even if some weeks are shorter.
• Missing the 72-hour final pay deadline after discharge. The clock runs from the time of discharge, including weekends in most readings, so process terminations the same day.
• Omitting itemized deductions from wage statements. Every paycheck must show hours, rate, gross pay, and each deduction.
• Posting jobs without a pay range. Since July 1, 2025, employers with five or more employees must include a wage or salary range in advertisements.

Frequently Asked Questions

What is the minimum wage in Vermont in 2026?

$14.42 per hour, with a $7.21 cash wage for tipped employees. The rate is indexed and changes every January 1.

Does Vermont require paid sick leave?

Yes. Employees accrue one hour of earned sick time for every 52 hours worked, up to 40 hours a year, after any waiting period of up to one year.

When is a final paycheck due in Vermont?

Within 72 hours of discharge. An employee who quits is paid on the last regular payday, or the following Friday if there is none.

Does Vermont require lunch breaks?

Vermont requires a reasonable opportunity to eat and use the restroom during the workday, but sets no minimum length. Meal periods of 30 minutes or more can be unpaid if fully duty-free.

Is overtime required after 40 hours in Vermont?

Yes for covered employers, though retail, restaurant, hotel, and hospital employees are exempt from the state law. Most of those employees still get federal overtime.

How often must Vermont employers pay employees?

Weekly, unless the employer gives written notice that it will pay biweekly or semimonthly. Payday must fall within six days of the end of the pay period.

Do Vermont employers have to pay out unused vacation?

Only if a written policy promises it. Unused earned sick time does not have to be paid out.

Do minors need working papers in Vermont?

Only minors under 16 who work during school hours need an employment certificate. Employers must keep proof of age for all workers under 18.

Sources

• Vermont Department of Labor, Wage and Hour
• Vermont Department of Labor, A Summary of Vermont Wage and Hour Laws (PDF)
• Vermont Department of Labor, Earned Sick Time FAQ (PDF)
• Vermont Department of Labor, Information for Employers on Child Labor Law (PDF)
• US Department of Labor, state minimum wage laws