labor lawAdivision of labor law center

The minimum wage in Vermont was increased on January 1, 2006 to $7.25 per hour. In addition, tipped employees received an increase to the maximum tip credit to $3.60 per hour. Vermont does not have a youth/training minimum.

Beginning January 1, 2007 and on each subsequent January 1, the minimum wage rate will be increased by five percent or the percentage increase of the Consumer Price Index, or city average, and not seasonally adjusted. Vermont’s overtime pay provision has very limited application because it exempts numerous types of establishments. For example, retail and service; seasonal amusement/recreation; hotels, motels, restaurants; and transportation employees to whom the Federal minimum wage rate (FLSA) overtime provision does not apply. If the Federal minimum wage rate is higher than the state’s minimum wage rate, the higher rate is automatically given.

For workers in the hotel, motel, tourist place and restaurant industry their tip credit for tips actually earned and retained is based on a basic wage rate of $3.65 per hour with the maximum tip credit allowed at $3.60 per hour. If an employee does not receive sufficient tips in the workweek to at least make the minimum wage of $7.25 per hour for all hours worked that week, their employer must make up the difference.

According to a Vermont Department of Labor’s 2004 study, no occupation in Vermont paid an average hourly wage at the federal minimum wage or lower. The lowest paying job recorded was for a dishwasher who earns $8.00 per hour. However, the study did show that approximately 18,000 Vermonters or about ten percent of the work force were paid at the rate of $7.00 per hour. These figures included tipped employees.

Because of the progressive legislation that was passed in Vermont, those ten percent of the work force receiving $7.00 per hour will see an increase every year to their wage. This will help them to keep up with rising costs of fuel, food and other everyday necessities.

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