Update Applicable to:	Effective Date
All Covered Employers in Vermont	July 1, 2025

What happened?

On May 28, 2025, the governor of Vermont signed the Senate Bill (SB) 0117 into law, which amends wage and hour, unemployment compensation, and workers’ compensation.

Overview:

Senate Bill S.117 introduces important changes to Vermont’s wage and hour, unemployment compensation, and workers’ compensation laws. Employers should review these updates carefully to ensure compliance and avoid penalties.

Wage & Hour Changes

• Unpaid Wages Penalty: If wages are willfully withheld, employers must pay up to double the unpaid amount.
  • Distribution: half to the employee, half to the state.

• Minimum Wage Adjustments: Future increases will be based on the lower of 5% or the CPI-U, rounded to the nearest cent.

Unemployment Compensation Updates

• Electronic Notices: Employers and claimants can now receive notices and determinations electronically.

• 10-Day Response Rule: Employers must respond to wage and separation information requests within 10 days.

• Successor Employers: If a business is acquired and split among entities, one must be designated to manage wage reporting and benefit taxes.

• Short-Time Compensation Program: Will resume in 2026 after IT system upgrades.

• Benefit Increases Delayed: Certain unemployment benefit increases are postponed to July 1, 2026, or earlier if the system is ready.

Workers’ Compensation Reforms

• Medical Case Management: Defined and now available if recommended by a provider or supported by evidence.

• Translation Services: Employers must provide translation for injured workers who do not speak English fluently.

• Preauthorization Rules: New timelines for insurers to approve or deny medical case management services.

• Late Payment Penalties: Weekly benefit payments must be made on time or face penalties:
  • 5% for the first late payment
  • 10% for the second
  • 15% for the third and beyond

• Quarterly Reporting: Employers must report late payments starting October 1, 2025. Failure to report may result in a $500 penalty.

Source References

• Vermont SB 117 – An act relating to wage and hour, unemployment compensation, and workers’ compensation
• Vermont Governors Press Release

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