Vermont minimum wage and tip laws (2026)

The minimum wage in Vermont is $14.42 an hour. It went up from $14.01 on January 1, 2026.

Minimum wage

$14.42

For a 40-hour week

$576.80

Source: 21 V.S.A. 384(a) (indexed each January 1 by the lesser of 5% or CPI; $14.42 effective 1/1/2026 per Vermont Department of Labor announcement) Read the rule

Employers in Vermont can pay tipped workers a cash wage as low as $7.21 an hour and count up to $7.21 an hour of tips toward the $14.42 minimum. That is called a tip credit. Your cash wage plus the tips you keep must reach at least $14.42 for every hour in each workweek. If they do not, your employer has to make up the difference.

Tips can count toward the wage

Yes

Tipped cash wage

$7.21

Maximum tip credit

$7.21

Employer must tell you first

Yes

Source: 21 V.S.A. 384(a): a service or tipped employee who customarily and regularly receives more than $120.00 per month in tips for direct and personal customer service may be paid a basic wage of not less than one-half the minimum wage ($7.21 in 2026). Read the rule

• Hours past 40 in a workweek are paid at 1.5 times your regular rate.

Overtime rate at minimum wage

$21.63

Overtime cash rate with a tip credit

$14.42

For tipped workers, overtime is figured on the full minimum wage, not the cash wage. At $14.42, that is $21.63 an hour, so with the full tip credit the overtime cash rate cannot be less than $14.42.

Source: 29 U.S.C. 207(a)(1); 29 CFR 778.107; Fact Sheet #15 (overtime for tipped employees is computed on the full minimum wage, not the cash wage) Read the rule

Meal break

Required, but the law does not set a length

Rest break

Required, but the law does not set a length

Extra pay for a missed break

No

Vermont requires these breaks but does not set a fixed premium, like an extra hour of pay, when one is missed. If you work through a meal break, that time has to be paid.

Source: 21 V.S.A. 304: an employer shall provide an employee with reasonable opportunities during work periods to eat and to use toilet facilities. No fixed length or timing is prescribed and there is no premium for a missed break. Read the rule

Taxes and deductions you agreed to, like health insurance, are normal. These are the ones that cause trouble in restaurants and bars, and what Vermont allows:

Required uniforms

Only if pay stays above minimum

Register or cash shortages

Only if pay stays above minimum

Broken dishes or equipment

Only if pay stays above minimum

Card processing fee on card tips

Only if pay stays above minimum

Customers who walk out

Only if pay stays above minimum

"Only if pay stays above minimum" means the deduction cannot take your pay for the week below minimum wage. For a worker paid a tipped cash wage, that usually leaves no room for a uniform, shortage, breakage or walkout deduction. A card fee works differently: only the fee on the card tip itself, taken from that tip.

Source: 29 CFR 531.35 (wages must be paid free and clear); Fact Sheet #16; Fact Sheet #15 (credit card fee deduction limited to the fee actually charged and may not reduce pay below minimum wage) Read the rule

Managers and owners can share in the pool

No

Kitchen staff can share when a tip credit is taken

No

Kitchen staff can share when no tip credit is taken

Yes

In most states, an employer can require tipped staff to pool tips with others who serve customers, like bussers, runners and bartenders. Managers, supervisors and owners can never take a share. Under federal law, cooks and dishwashers can share only when the employer takes no tip credit, and some states do not allow it at all. The answers above show the rule in Vermont.

Source: 29 U.S.C. 203(m)(2)(B); 29 CFR 531.54 Read the rule

Under federal law, a mandatory service charge, like an automatic 20% on large parties, is not a tip. It belongs to the business unless it is paid out, and when it is paid to you it counts as wages. It cannot be used to cover the tip credit, and it should not be reported as tips on your stub. Some states give the charge to the staff when customers were not clearly told it is not a tip, so if a charge was presented as a gratuity, it is worth asking where it went.

Source: 29 CFR 531.55 (a compulsory service charge is not a tip) Read the rule

Vermont requires employers to give paid sick leave.

You earn

1 hour for every 52 hours worked

Yearly use can be capped at

40 hours

Source: 21 V.S.A. 481-486 (Earned Sick Time): not less than 1 hour per 52 hours worked; the employer may cap accrual and use at 40 hours per 12-month period. Covers employees averaging at least 18 hours per week; excludes jobs of 20 weeks or fewer, per diem workers and employees under 18. Read the rule

Some parts of Vermont law depend on things a pay stub does not show. A TruWage result for Vermont can be off if any of these apply to you:

• If you receive $120.00 or less in tips a month, you are not a tipped employee in Vermont and must be paid the full minimum wage for every hour rather than the half-rate cash wage. This check assumes you qualify as tipped.

Start with your manager or payroll and show them the numbers. Many mistakes get fixed that way. If it is not fixed, you can file a wage claim. It is free and you do not need a lawyer.

Agency

Vermont Department of Labor, Wage and Hour Unit

Phone

802-951-4083

File the online wage claim form or the PDF Wage Claim Form. Email Labor.WageHour@vermont.gov. Office: 63 Pearl Street, Burlington, VT 05401-4331. Claims for wages more than two years past due are not accepted.

How to file a wage claim

You can also file with the U.S. Department of Labor, Wage and Hour Division, which enforces federal wage law, at 1-866-487-9243. They take complaints in many languages and keep the name of the person complaining confidential.