How Much Is Minimum Wage in Vermont: Tips, Overtime, Exemptions

Vermont’s minimum wage is $14.42 per hour as of January 1, 2026, up from $14.01 in 2025.¹ The rate applies to any employer with two or more employees, which covers nearly every workplace in the state.² Because federal law only requires $7.25 per hour and the two laws together require whichever rate is higher, the Vermont figure is the one that controls your paycheck.

Tipped Workers Earn a Different Base Rate

If you work in a hotel, motel, tourist spot, or restaurant and regularly take in more than $120 a month in tips, your employer can pay a base wage of $7.21 per hour. That is exactly half the standard minimum.¹

Tips are expected to close the gap. If they don’t, and your combined hourly earnings for the week fall short of $14.42, your employer has to make up the difference.³ Keeping your own tip log is the easiest way to catch a shortfall before payday.

Overtime After 40 Hours

Vermont requires time-and-a-half for every hour worked beyond 40 in a single workweek.⁴ At the current minimum, that works out to at least $21.63 per overtime hour. Each week is counted on its own; an employer cannot average a 50-hour week against a 30-hour week to avoid paying overtime.

Salaried workers in genuine executive, administrative, or professional roles are exempt from overtime, along with several of the categories listed below. If your situation is unclear, the Department of Labor’s Wage and Hour Unit can tell you where you stand.

Who Isn’t Covered

Vermont’s minimum wage law carves out several groups from its definition of “employee,” meaning the $14.42 state rate does not apply to them:²

Agricultural workers
Domestic service workers in or around a private home
Federal government employees
Employees of publicly supported nonprofit organizations, except laundry workers, nurses’ aides, and practical nurses, who remain covered
Bona fide executive, administrative, and professional employees
Newspaper and advertising home-delivery workers
Taxi drivers
Outside salespersons
Students employed during the school year or vacation periods

Workers in these categories may still be entitled to the federal $7.25 minimum under the Fair Labor Standards Act depending on the specifics of the job. Agricultural workers, for instance, generally receive at least the federal rate unless the employer used fewer than 500 person-days of agricultural labor in any calendar quarter of the previous year.

How the Rate Changes Each Year

The minimum wage adjusts automatically every January 1. The Department of Labor applies the smaller of two numbers: the percentage change in the Consumer Price Index for All Urban Consumers over the 12 months ending the previous September 1, or five percent.⁴ The five-percent ceiling keeps a single high-inflation year from producing a sharp spike.

The statute also prevents the wage from ever dropping. If inflation turns negative, the prior year’s rate simply carries forward.⁴ Recent rates:

2024: $13.67 per hour ($6.84 tipped)
2025: $14.01 per hour ($7.01 tipped)
2026: $14.42 per hour ($7.21 tipped)

The tipped rate always equals half the full minimum, so both numbers move together each January.³

What to Do If You’re Being Underpaid

If your pay is coming in below the required rate, file a complaint through the Vermont Department of Labor’s Online Wage Claim Form.⁵ You have two years from the date wages were due to bring a claim. Miss that window and the state can no longer recover those wages for you.⁶

The form asks for your employment dates, agreed hourly rate, hours worked each week, what you were actually paid, and what you believe you are owed. You check a box for the type of violation, which includes minimum wage, unpaid overtime, unpaid wages, and earned sick time among others. The Department forwards a copy of the claim to your employer as part of the investigation.⁵

For help filling out the form or questions about whether your situation qualifies, the Wage and Hour Unit answers at 802-951-4083 or Labor.WageHour@vermont.gov.¹ Employers that violate the wage laws can be fined up to $5,000, and corporate officers who knowingly participated in the underpayment can be held personally liable for the wages owed.⁷

1
State of Vermont Department of Labor. The Vermont Department of Labor Announces Minimum Wage Increase Starting January 2026
2
Vermont General Assembly. Vermont Code Title 21 Chapter 005 – Definitions
3
State of Vermont Department of Labor. Worker Rights and Wages
4
Vermont General Assembly. Vermont Code Title 21 Chapter 005 – Minimum Wage
5
State of Vermont Department of Labor. Online Wage Claim Form
6
Vermont General Assembly. Vermont Code Title 12 Chapter 023 – Payment of Wages
7
Vermont General Assembly. Vermont Code Title 21 Chapter 5 345 – Nonpayment of Wages and Benefits