Compliance Watch:

What are my rights as a salaried employee in Vermont?

Vermont salaried employees laws define a salaried employee in the state as any employee who receives a fixed predetermined compensation at the end of every pay period. The typical pay period in the state is one week. However, Vermont labor laws allow employers to pay salaried bi-weekly or semi-monthly if they provide written notice to that effect to the employees. Regardless of the frequency of pay and length of the pay period, employers must pay employees by direct electronic funds transfers to their savings or checking accounts.

Salaried employees in Vermont are entitled to the following rights and protections:

• Minimum Wage: Salaried employees who are subject to Vermont overtime laws and minimum wage regulations are entitled to the state’s minimum wage of  $13.67 as of January 1, 2024. Salaried employees who are exempt from the state’s overtime and minimum wage laws are entitled to a minimum compensation of $844 per week ($43,888 per year).
• Overtime Pay: Eligible salaried employees in Vermont are entitled to overtime pay of 1.5 times their regular pay for all time worked in excess of 40 hours in a workweek. 
• Workplace Safety: Employers in the state are required to provide safe work conditions that do not pose serious risks of harm to employees. In addition to a safe work environment, every employee in the state can request an inspection of their workplace, request copies of inspections done to identify hazards in the workplace and request training on ways of avoiding harm in their workplace. 
• Family and Medical Leave: Salaried employees who meet the federal criteria for exemption from the state’s labor and overtime regulations are entitled to family and medical leave in accordance with the stipulations of the Family and Medical Leave Act (FMLA).
• Whistleblower Protection: Employees in Vermont are protected from retaliation for reporting the violation of labor laws and other laws or refusing to comply with any orders that violate the law. Please note that this protection does not extend to an employee’s disclosure of confidential information and only applies if the employee’s report of their employer’s violation of the law is in good faith.
• Protection from Discrimination: All employees in the state enjoy the protection of Vermont’s Fair Employment Practices Act (FEPA), which protects them from any form of harassment, intimidation, and discrimination on the basis of any of the following protected characteristics: 

1. • Race
   • Color
   • Place of Birth
   • National Origin
   • Ancestry
   • Religion
   • Gender Identity
   • Sexual Orientation
   • Sex
   • Age (18 or over)
   • Disability
   • HIV+ status
   • Crime Victim status
   • Health insurance coverage status
   • Association with a member of a protected category

Yes, Vermont overtime laws require employers with more than one employee to pay eligible salaried employees overtime for all time worked in excess of 40 hours in a workweek.  It’s important to note that some employees who do not meet the state’s criteria for exemption from overtime may be eligible for overtime pay in Vermont if they are eligible for overtime under federal law. That said, the state establishes a few exemptions to overtime as follows:

• Overtime pay is not applicable to employees of retail and service establishments.
• Certain employees of amusement and recreational establishments are not eligible for overtime pay.
• Employees of hotels, motels, and restaurants are not eligible for overtime.
• Select employees of healthcare establishments, including hospitals, public health centers, nursing homes, maternity homes, therapeutic community residences, and residential care homes are not eligible for overtime.
• Employees of transport businesses who are exempted from overtime by the Fair Labor Standards Act (FLSA) are not eligible for overtime.
• Employees of state political subdivisions are ineligible for overtime.

Yes, employers in Vermont are allowed to make the following wage deductions:

• Conditional deductions for employer-provided goods and services.
• Deductions authorized by court orders, state or federal laws.
• Deductions for meals and lodging facilities are provided by the employer.

The state prohibits a few deductions explicitly. These include deductions to recover cash register shortages, damages to property, uniforms and work equipment, and deductibles for state-mandated healthcare contributions.

Yes, employers in Vermont are required to provide mandatory breaks. Although the state’s laws do not establish a specific length of these breaks, employees are entitled to reasonable break periods for meals and health and hygiene purposes. Short breaks of up to 30 minutes are compensable time, but longer breaks can be unpaid if an employee is relieved of all their duties and takes an uninterrupted rest. 

In addition to reasonable meal and rest breaks, salaried employees in Vermont are entitled to the following types of leave:

• Earned Sick Time Off: Salaried employees who work in Vermont earn sick time off at a rate of one hour of sick time for every 52 hours of work for up to 24 hours in a calendar year. Time worked in excess of 40 hours in a workweek counts towards the number of hours worked in the accrual of sick time off. Please note that some salaried employees are exempted from this benefit. These include government employees, part-time and seasonal employees who work less than 18 and 20 hours a week, respectively, short-term substitute teachers, per-diem healthcare workers, and minor employees. 
• Parental Leave: Employees whose employers have more than 9 employees working 30 or more hours every workweek are entitled to up to 12 weeks of unpaid parental leave during pregnancy and after the birth of their child or within 12 months of the adoption of a child under 16 years.
• Family Leave: Employees whose employers have 15 or more employees who work 30 or more hours every workweek are entitled to up to 12 weeks of unpaid family leave every 12 months. 
• Short-Term Family Leave: Employees in Vermont are entitled to short leaves of up to 4 hours every month for up to 24 hours a year for family-related activities such as school activities for their children, medical appointments for children and spouses, and to accompany their parents to professional appointments related to their health and overall well being.

Vermont labor laws define flexible work arrangements as temporary or permanent changes in an employee’s work hours, work days, clock-in and clock-out times, and location of work. Salaried employees in the state can put in requests to adopt any work arrangements that deviate from their typical work schedules at least twice every year. However, their employer is at liberty to turn down requests for flexible work arrangements if they are inconsistent with their business operations. 

Please note that an employer can only deem a proposed flexible work arrangement as inconsistent with the business operations if it affects their ability to meet customer demand, increases costs, affects employee morale, affects business performance, and makes it impossible to reorganize work.

Exempt status in the state refers to ineligibility for overtime and minimum wage. Accordingly, Vermont establishes two types of exemption. First, select categories of employees in the state are exempted from its minimum wage regulations. These include: 

• Taxi cab drivers
• Full-time high school students
• Agricultural workers
• Outside salespersons
• Newspaper or advertisement home delivery persons
• Domestic workers employed in private homes
• Employees of the United States Government
• Certain employees of public-sponsored charities

It’s important to note that employees who are exempted from state minimum wage laws by federal laws are considered exempt in Vermont as well. 

In addition to these exemptions from minimum wage, the state exempts other categories of employees from its overtime laws. These include employees of amusement and recreational parks, retail and service establishments, political divisions of the state, hotels, motels, and restaurants, select transport businesses, and select employees in healthcare organizations.

Vermont upholds the federal exemptions from minimum wage and overtime laws as outlined by the FLSA. The resulting exempt status has the following implications on the exempt employees:

1. Basis and Frequency of Compensation: Exempt employees in Vermont typically receive a fixed, predetermined salary regardless of the number of hours worked in a workweek and the quality of their work. 
2. Overtime Eligibility: Exempt employees are typically not eligible for overtime pay. Therefore, they do not receive any additional compensation for exceeding 40 hours in a workweek. 
3. Flexibility in Work Hours: Exempt employees in Vermont can request for changes in their work schedules. If their requests are honored, the employees have more flexibility in their work hours, allowing them to balance their work and personal and family needs better. 

Having employees who meet the federal criteria for exemption has the following implications for employers in Vermont:

1. Salary Level Requirement: Exempt employees in Vermont must be paid a salary of at least $844 per week or $43,888 per year. 
2. Administrative Duties: Since exempt employees are not eligible for overtime pay under federal law, their salaries remain constant regardless of the number of hours worked, making payroll and timesheet management easier.
3. Job Duties and Classification: Employers must classify employees accurately by ensuring that the employee’s job duties meet the specific criteria outlined by the FLSA. Misclassification has legal consequences.

The primary reference for employee classification is the FLSA. To determine whether you meet the federal criteria for exemption, consider the following tests:

• Salary Basis Test: The FLSA requires employers to pay all exempt employees on a salary basis. Therefore, exempt employees in Vermont must receive fixed salaries either weekly, once in every two weeks, or semi-monthly. 
• Salary Threshold Test: Exempt employees in Vermont must receive a minimum salary that meets or exceeds the FLSA’s minimum salary threshold of $844 per week.  
• Duties Test: Vermont upholds four categories of duty-based exemptions as outlined by the FLSA. These include: 
  • Administrative Exemption: Administrative employees who pass the salary basis and threshold tests are considered exempt if they perform office or non-manual work that is directly related to management of their employer’s business and exercise discretion and independent judgment in their work. 
  • Professional Exemption: The professional exemption applies to bona fide professionals such as doctors, lawyers, and architects and creative employees such as artists who meet the salary basis and threshold criteria. 
  • Executive Exemption: Employees who meet the salary basis and threshold criteria and occupy executive positions are considered exempt if their primary duties involve managing a business or a department, supervising two or more full-time employees, and weighing in on material personnel decisions. 
  • Outside Sales Exemption: Vermont confers exempt status to sales employees who meet the salary basis and threshold criteria and are engaged in making sales away from their employer’s premises.

Salaried employees in Vermont who do not meet the FLSA’s criteria for exemption are entitled to compensation of at least the state’s minimum wage of $13.67 per hour. Exempt employees, on the other hand, are entitled to compensation of at least $844 per week ($43,888 a year).

Eligible salaried employees in the state are entitled to overtime pay at a rate of at least 1.5 times their regular rate of compensation for all time worked in excess of 40 hours in a workweek. It’s important to note that overtime accrues weekly and not daily. Therefore, an employee who exceeds the standard 8 hours of work in a workday is not entitled to overtime pay if they do not exceed 40 hours in the workweek. Additionally, if an employee works different jobs with different rates of pay, overtime will be computed as 1.5 times the average of all rates of pay combined. 

Vermont does not have specific laws on compensatory time. However, federal provisions that limit the circumstances under which comp time is allowed apply to salaried employees in the state. As such, employees of state and local government agencies in Vermont can opt for compensatory time in lieu of monetary compensation for overtime. Eligible employees accrue comp time at a rate of at least 1.5 hours for every hour of overtime for up to 480 hours a year for firefighters, police officers, and emergency response staff and 240 hours a year for all other employees.

Vermont labor laws outline several permissible wage deductions. These include:

• Deductions for Goods and Services: Employers are allowed to deduct the cost of goods and services provided to employees. However, employees must authorize such deductions in writing and the deduction should not reduce an employee’s salary below the minimum wage. 
• Deductions Authorized by Law: Employers are allowed to withhold state and federal income taxes and comply with court orders requiring them to make wage deductions for child support and other garnishments. 
• Voluntary Deductions: Employees can authorize deductions for contributions to retirement plans or health insurance.
• Deductions for Employer-Provided Meals and Lodging: Employers who provide meals and accommodation to employees are allowed to recover the cost of both provisions from an employee’s salary.

Vermont offers various benefits and protections to employees. Key employee benefits and protections in the state include: 

• Minimum Wage: Employees in Vermont are entitled to a minimum wage rate that is higher than the federal minimum wage. 
• Family and Medical Leave: Employees in Vermont are entitled to different types of leave, including family leave, sick time off, and parental leave for the birth or adoption of a child.
• Workers’ Compensation: Employees in Vermont are entitled to no-fault workers’ compensation for work-related illnesses and injuries. The insurance provides benefits such as temporary disability, medical benefits, wage replacement, and death benefits, which are paid to the beneficiary of employees who succumb to work-related injuries and illnesses. 
• Anti-Discrimination Protections: Workplace discrimination on the basis of any protected characteristics is prohibited in Vermont. Employees in the state are also protected from retaliation for reporting labor law violations.
• Whistleblower Protection: Vermont laws protect employees who report unlawful or unsafe activities in the workplace. However, the protection is only provided if the reports are made in good faith.

The State of Vermont Department of Labor oversees minimum wage, overtime, child labor, and employee benefit disputes. You can report any of these violations to the department by filling out the Vermont Online Wage Claim Form. You can also report workplace safety violations to the Vermont Occupational Safety and Health Administration (VOSHA) just as easily by filling out the Vermont Workplace Safety Complaint Form.