How does Vermont's CPI adjustment work?

Vermont's minimum wage is adjusted each January 1 by the CPI-U, capped at the lesser of 5% or CPI. The rate cannot decrease from the prior year. The Vermont Department of Labor announces the new rate each fall. The January 1, 2026 rate of $14.42 reflects a CPI-U adjustment from the prior $14.01/hr rate — a $0.41/hr increase for 2026.

Does Vermont's overtime exemption affect restaurants and hotels?

Yes. Under 21 V.S.A. § 384(b), broad exemptions apply to retail/service establishments (those where at least 75% of annual sales are retail in nature and most sales are not for resale), hotels/motels/restaurants, and seasonal amusements. Employees at these establishments may be exempt from Vermont's state overtime requirement, though FLSA weekly-40 overtime still applies if the employer is FLSA-covered.

How does Vermont's sick leave accrual compare to other states?

Vermont's Earned Sick Time Act (21 V.S.A. §§ 481–487) accrues at 1 hour per 52 hours worked — a higher divisor than most states, which typically use 1 hour per 30 or 40 hours. An employee working 40 hours/week accrues about 0.77 hours per week in Vermont versus 1.0 hour per week in a 40-hour-divisor state. The annual cap is 40 hours, with a 1-year employer waiting period permitted.

State

StateAll Vermont tools

Vermont's minimum wage is $14.42 per hour, effective January 1, 2026 through December 31, 2026, under 21 V.S.A. § 384. The rate is CPI-U indexed annually at the lesser of 5% or CPI and cannot decrease.— Source: Vermont Department of Labor

Vermont wage law

Vermont Minimum Wage 2026

Vermont's minimum wage is $14.42/hr in 2026 — automatically CPI-adjusted each January 1, with the tipped rate locked at 50% of the full rate so both move together. Vermont's overtime law has unusually broad industry exemptions, and the Earned Sick Time Act accrues at 1 hour per 52 hours worked — a slower rate than most comparable state laws.

Estimate your weekly gross minimum pay

Vermont minimum wage — 21 V.S.A. § 384

Vermont's minimum wage is set by 21 V.S.A. § 384, codified in the Vermont Statutes. The current rate of $14.42/hr is effective January 1, 2026 and reflects the CPI-U adjustment from the prior $14.01/hr rate — a $0.41/hr increase. The rate cannot decrease from its prior year level. The Vermont Department of Labor announces the new rate each fall.

Prior rate: $14.01/hr (January 1, 2025 – December 31, 2025)

Basic calculation — 40 hours

40 hours × $14.42/hr = $576.80Tipped worker (50% rate): 40 hours × $7.210/hr = $288.40 direct Tips must bring total to $$576.80 minimum

Tipped workers — 50% direct wage

Vermont's tipped direct cash wage is exactly 50% of the non-tipped minimum wage under 21 V.S.A. § 384 — $7.21/hr in 2026 (half of $14.42). The tipped rate adjusts automatically with each CPI increase; no separate rulemaking is needed. If tips in any workweek do not bring total compensation to $14.42/hr, the employer must make up the difference for that week.

Overtime exemptions — 21 V.S.A. § 384(b)

Vermont's overtime law at 21 V.S.A. § 384(b) provides 1.5× after 40 hours/week — but with broad industry exemptions that are narrower in most other states:

Retail/service establishments — where at least 75% of annual dollar sales are retail sales and most sales are not for resale (similar to a federal FLSA exemption but applied at the state level).
Hotels, motels, and restaurants — employees in these categories may be exempt from Vermont's state overtime threshold.
Seasonal amusements — similarly exempt.

FLSA weekly-40 overtime still applies to these workers if their employer meets FLSA's enterprise threshold. The Vermont exemptions reduce state-law overtime protection but do not eliminate federal protection for covered workers.

Earned sick time — 1 hour per 52 hours worked

Vermont's Earned Sick Time Act (21 V.S.A. §§ 481–487) accrues at 1 hour per 52 hours worked — the highest divisor (slowest accrual) among state sick-leave laws. For comparison, Rhode Island and Connecticut use 1/30, Washington uses 1/40. A Vermont employee working 40 hours/week accrues approximately 0.77 hours of sick leave per week, versus 1.0 hour in a 40-divisor state. The annual cap is 40 hours. Employers may impose a 1-year waiting period before use. The law applies to employees averaging 18 or more hours per week.

Final paycheck rules

Under 21 V.S.A. § 342(b):

Voluntary quit: final wages due on the last regular payday, or the next Friday if no regular payday exists.
Discharge: final wages due within 72 hours of the discharge.

The 72-hour rule for discharged employees is one of the shorter employer-discharge deadlines in New England. Details are on the Vermont Final Paycheck page.

Vermont compared to neighboring New Hampshire

New Hampshire's RSA 279:21 adopts the federal minimum wage by reference with no dollar figure stated — a "tracks federal" statute that means New Hampshire's floor rises only when Congress acts. Vermont's $14.42/hr CPI-indexed rate is $7.17/hr above New Hampshire's effective $7.25 federal floor. A Vermont employee doing the same work as a New Hampshire employee earns nearly twice the minimum wage under state law alone.

What this page does not determine

Whether a specific employer qualifies for the retail/hotel/restaurant overtime exemption under § 384(b).
Whether a specific worker is exempt from Vermont minimum wage or overtime.
Sick leave accrual calculations — see the Vermont Sick Leave page.
Final paycheck rules — see the Vermont Final Paycheck page.
Whether a local Vermont municipality has enacted a higher minimum wage (none confirmed as of August 2026).

Sources and verification

The $14.42/hr rate and January 1, 2026 effective date are verified from the Vermont Department of Labor press release. The tipped rate (50% of non-tipped), the CPI-U indexing mechanism (lesser of 5% or CPI), and the overtime exemptions are from 21 V.S.A. § 384 at legislature.vermont.gov. The sick leave divisor (1/52) is from 21 V.S.A. §§ 481–487. Verification date: August 2026. See the site's methodology for source standards.

Common questions

What is Vermont's minimum wage in 2026?

Vermont's minimum wage is $14.42 per hour, effective January 1, 2026 through December 31, 2026, under 21 V.S.A. § 384. The prior rate was $14.01/hr in 2025. The rate is CPI-U indexed annually at the lesser of 5% or CPI, confirmed from the Vermont Department of Labor at labor.vermont.gov.

What is Vermont's tipped minimum wage?

Vermont's tipped direct cash wage is $7.21/hr in 2026 — exactly 50% of the $14.42 standard rate under 21 V.S.A. § 384. The tipped rate updates automatically when the standard rate changes each January. If tips don't bring total pay to $14.42/hr in a given workweek, the employer must make up the difference.

Are restaurant workers exempt from Vermont overtime?

Vermont's state overtime law (21 V.S.A. § 384(b)) exempts hotels, motels, and restaurant employees from the state overtime rule. However, FLSA weekly-40 overtime still applies if the employer meets FLSA's enterprise threshold. Workers at a large restaurant chain are almost certainly FLSA-covered and owed federal overtime regardless of the state exemption.

How does Vermont's sick leave accrue?

Vermont's Earned Sick Time Act (21 V.S.A. §§ 481–487) accrues at 1 hour per 52 hours worked — the slowest accrual rate among state sick-leave laws. The annual cap is 40 hours. A 1-year waiting period before use is permitted. The law applies to employees averaging 18 or more hours/week, confirmed from legislature.vermont.gov.

When does Vermont increase its minimum wage again?

Vermont's minimum wage increases each January 1 by the CPI-U, capped at the lesser of 5% or CPI. The 2027 rate will be announced by the Vermont Department of Labor in fall 2026. The rate cannot fall below the current $14.42/hr level. There is no separate scheduled step increase for 2027; the exact amount depends on the CPI calculation.