Vermont Passes New Minimum Wage Rate

The Vermont Legislature on Feb. 25 passed a plan to increase the state’s minimum wage rate, narrowly overriding a veto from the governor.

Minimum wage in Vermont currently sits at $10.96 an hour. The bill calls for phased increases on Jan. 1 the next two years:

• $11.75 in 2021
• $12.55 in 2022

Increases after that point will be tied to the Consumer Price Index.

Employers should expect to be required to display a new posting about the minimum wage increase next fall/winter.

Early 2020 State Minimum Wage Updates

The measure is expected to increase wages for about 40,000 Vermont residents.

Some Democrats had pushed for a higher minimum wage. Vermont Gov. Phil Scott, a Republican, vetoed a bill during a previous session that would have eventually made minimum wage $15 an hour. He released a statement following the veto override, noting worries that the measure would negatively impact rural businesses.

“These concerns were shared by legislators of both parties. However, with the legislature choosing to override these concerns, I hope for the sake of our rural communities they are correct,” he said. “We simply cannot sustain more job losses or closed businesses, particularly outside the greater Burlington area. While disappointing, it’s now more important than ever to move forward and focus on policies that actually grow the economy, make Vermont more affordable, attract more to our workforce to reverse our demographic crisis and help workers move up the economic ladder with more skills for better paying jobs.”

Meanwhile, the minimum wage for tipped workers will remain the same, $5.48. But Vermont officials plan to study the rate for tipped, student and agricultural workers before Jan. 1, 2021.

Minimum Wage Increases Nationwide

Vermont is the latest in a line of states that have passed minimum wage increases. Additionally, cities and counties continue to enact their own rate bumps, even in states that still follow the federal minimum wage.

Progressive states such as California have several cities with their own minimum wage rates. And Colorado just last year repealed a ban on cities setting their own rates. Already Denver has established a new rate, which went into effect Jan. 1.

The federal minimum wage, $7.25, has not been raised since 2009, the longest stretch without an increase in the history of the U.S.

Still, with CPI increases, urban and rural rates, and opt-in and opt-out laws, minimum wage has become a major challenge for businesses. Plus, governments have turned from education to enforcement. Headlines about companies violating wage theft laws have begun to spring up more often.

Employers should be sure to consult local laws where they have locations to remain complaint.

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