On January 1, 2026, Vermont’s minimum wage increased to $14.42 per hour, representing a rise of 41 cents or 2.9% from the previous year. The annual adjustment is determined by state law and is based on the lower value between a 5% increase or the change in the consumer price index.
The minimum wage law in Vermont applies to all employers with at least two employees and covers most workers except those employed in agriculture, outside sales, students, and individuals working in executive, administrative, or professional roles.
Employers are allowed to pay tipped employees a lower base rate if they earn at least $120 per month in tips. For 2026, this tipped minimum wage is set at $7.21 per hour—half of the regular minimum wage—for those who make at least $14.48 per hour including tips. If an employee’s total hourly earnings fall below this threshold after accounting for tips, employers must cover the difference.
Vermont now ranks seventeenth highest among U.S. states for its minimum wage rate. Nationwide, thirty states have rates above the federal minimum of $7.25 per hour; twenty states have rates equal to or less than that amount.
Employers in Vermont are required to display a notice about the new minimum wage along with other mandatory workplace posters.
The National Federation of Independent Business – Vermont provides advocacy for small and independent businesses throughout the state to influence government policies and protect their operations. This organization supports members on issues such as taxes and regulations while representing them across various industries through member-driven initiatives (https://limpar.locallabs.com/organizations/6b9c829a-4e00-44f4-994f-bf0b757f159b).