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4 Ways to Hire Employees In Vermont

Hiring in Vermont for the first time can be challenging, especially with the state's complex employment laws. Whether you're hiring independent contractors, setting up a legal entity, partnering with a PEO, or using an Employer of Record (EOR), it's essential to understand the local employment landscape. Playroll's comprehensive guide is here to help, whether you're onboarding local talent or relocating team members.

Here are four primary ways companies can hire employees in Vermont:

Establishing a local entity: Creating a legal entity in Vermont allows for direct hiring, but it can be costly and time-consuming. However, it gives you full control over employment and reduces risk exposure.
Partnering with an Employer of Record (EOR): An EOR, like Playroll, takes on the legal responsibilities of employment, acting as the employer on your behalf. This option streamlines hiring, payroll, and compliance with Vermont’s labor laws, helping you hire in Vermont without navigating the complex legal landscape yourself.
Working with a Professional Employer Organization (PEO): A PEO, such as Playroll, co-employs your team, managing essential HR functions like payroll, benefits, and compliance. Partnering with a PEO ensures you meet Vermont’s labor regulations while offering competitive employee benefits.
Hiring independent contractors: Hiring independent contractors can be more cost-effective, but Vermont has strict contractor classification rules. Proper classification is essential to avoid penalties for misclassification when hiring in Vermont.

Complying with Vermont specific employment regulations and federal laws is critical to avoiding legal risks and costly fines. Our guide focuses on hiring in Vermont, employment compliance, and how Playroll’s services can support your business as you navigate the complexities of hiring in the state.

Good to Know

Vermont has a population of approximately 645,000, making it one of the least populous states in the U.S.

Key industries include tourism, agriculture (notably dairy farming), and manufacturing.

Vermont employers must comply with strict environmental laws, which may influence certain business operations.

The state is known for its progressive labor laws, including requirements for paid sick leave and robust anti-discrimination protections.

Key Things to Know About Hiring in Vermont

Employment and Labor Laws in Vermont

Working Hours in Vermont

Vermont has specific employment and labor laws governing working hours, designed to protect employees’ rights and ensure fair compensation. Whether you’re hiring local employees or working with an Employer of Record (EOR), it's essential to understand the state's regulations around working hours to ensure compliance.

1.Standard Workweek and Overtime

Standard workweek: 40 hours per week.
Overtime: 1.5 times the regular pay rate for hours worked beyond 40 in a workweek.

2.Meal and Rest Breaks

Employees are entitled to a "reasonable opportunity" for meal breaks during work hours.
Breaks are not explicitly defined in duration but must comply with general safety and health considerations.

Minimum Wage in Vermont

As of 2024, the minimum wage in Vermont is $13.18 per hour.

Urban areas like Burlington may have higher living costs, which employers should consider when setting wages.
Annual increases to the minimum wage are tied to inflation rates or set by the legislature.

Overtime in Vermont

Employers in Vermont are required to pay overtime at a rate of 1.5 times an employee’s regular hourly wage for hours worked beyond 40 in a workweek. Exemptions to overtime rules include salaried professionals, executives, and certain agricultural workers. It’s essential to verify an employee’s classification to determine overtime eligibility.

Onboarding New Hires in Vermont

We can help you get your new employee started in Vermont fast, with a minimum onboarding time from just 1-2 working days. Note that the timeline is dependent upon registration with the local authorities, and begins after the employee has submitted all the required information on the Playroll platform.

For non-citizens of the US, a work eligibility assessment may be required, and can add three extra days to the onboarding time. If a follow-up is needed, there may be additional delays.

Please note that payroll cut-off dates can impact the actual first day of employment. Playroll’s payroll cut-off date is the 10th of the month, unless otherwise specified.

Payroll Taxes For Vermont

Payroll taxes in Vermont are deductions employers must take from employees’ wages and remit to the state. These taxes fund various state programs and services, including unemployment benefits and disability insurance. Examples of payroll taxes include:

Unemployment Insurance Tax: A percentage paid by employers to fund unemployment benefits. Rates vary based on experience ratings.
State Income Tax Withholding: Deducted from employee wages based on individual income levels and filing status.

Payroll Cycle in Vermont

Employers in Vermont are required to pay employees at least biweekly. Certain industries, such as agriculture, may follow alternative schedules but must ensure that employees are paid promptly and in compliance with state laws. The timing of final paychecks is also regulated, requiring payment within 72 hours of termination.

Looking to grow your team in Vermont?

Stay Compliant: Navigate Vermont’s complex labor laws with ease.

Affordable Solution: Reduce costs with a budget-friendly EOR option.

Top-Tier Benefits: Access competitive Vermont and federal employee benefits for a stronger team.

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Vermont Employment Taxes

Employment taxes and statutory fees affect both your payroll and your employees’ paychecks in Vermont. Understanding the tax obligations for both employers and employees is crucial when operating in Vermont’s business landscape.

Employer Tax Contributions

Employers in Vermont are responsible for several tax contributions, including unemployment insurance and workers’ compensation. Employer payroll contributions are generally estimated at an additional 12.50% on top of the employee salary in Vermont.

Employment Tax Type	Tax Rate
Unemployment Insurance Tax	1.1% - 8.4%
Workers' Compensation Insurance	Varies by industry

Employee Tax Contributions

Employee tax contributions are generally estimated at 3.35% - 8.75% of employee salary in Vermont.

Employee Payroll Tax Contribution	Tax Rate
State Income Tax	3.35% - 8.75%
Social Security and Medicare (FICA)	7.65%

The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Vermont tailored to your needs.

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Employee Benefits Requirements in Vermont

Employers in Vermont are required to provide certain employee benefits, such as health insurance and paid sick leave, depending on the size of their workforce and the nature of their business. Employers should explore global benefit packages for competitive offerings.

Employee Benefits for Vermont

Competitive benefits are essential for attracting and retaining top talent in Vermont. Offering the right package helps employees feel valued and motivated. Our benefits experts understand the local labor market's trends, requirements, and expectations, ensuring your employees feel valued and supported. Common benefits in our Vermont packages include:

Pension or 401(K)
Vision Insurance
Life Insurance
Medical Insurance
Dental Insurance
Health Savings Plan (HSA)
Flexible Spending Account (FSA)

Paid and Unpaid Leave Policies in Vermont

Paid Sick Leave

Employees earn one hour of paid sick leave for every 52 hours worked, up to a maximum of 40 hours annually.

Parental Leave

Employers with 10+ employees must provide up to 12 weeks of unpaid parental leave for qualifying events, such as the birth of a child.

Voting Leave

Employees are entitled to a reasonable amount of time off to vote in elections.

Military Leave

Leave is provided for employees called to active military duty, in line with federal requirements.

Jury Duty Leave

Employees must be given unpaid leave to serve on a jury, with job protection ensured during the period of service.

It’s Easy To Manage Benefits For Employees In Vermont With Playroll

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Employment Termination Protocols in Vermont

Hiring Employees in Vermont with an employer of record

An Employer of Record makes it easy to hire in Vermont if you don’t have your own entity set up, by handling the heavy-lifting for you. They take care of compliant employment contracts, all required taxes, and benefits administration for you, so you can focus on growth instead

The employer of record is responsible for:

Employment Compliance: Ensure all employment contracts comply with Vermont's labor laws and regulations, including proper classification of employees.
Payroll Management: Calculate, process, and distribute employee salaries in accordance with Vermont's payroll laws, including deductions for taxes and social security contributions.
Tax Filing and Contributions: Handle the registration, filing, and payment of employer taxes and social security contributions to the relevant authorities.
Employment Contracts: Draft and maintain compliant employment agreements, detailing salary, benefits, working hours, and termination terms in line with Vermont's legal requirements.
Benefits Administration: Provide mandatory employee benefits as required by Vermont's labor laws, such as health insurance, pension contributions, and statutory leave.

Employer of Record for Vermont

How to Hire Employees in Vermont