Vermont Expected to Raise Minimum Wage to $10.50 Over Next Four Years

Author: Michael Cardman, XpertHR Legal Editor

May 13, 2014

Vermont's legislature has passed a bill that would gradually raise the minimum wage to $10.50 over the next four years.

Gov. Peter Shumlin said he "will be proud" to sign the bill into law, but a date has not been set.

The bill, which on May 9 passed the state House of Representatives by a vote of 132-3, would raise Vermont's minimum wage in four stages:

• To $9.15 per hour beginning January 1, 2015;
• To $9.60 per hour beginning January 1, 2016;
• To $10.00 per hour beginning January 1, 2017; and
• To $10.50 per hour beginning January 1, 2018.

Beginning January 1, 2019, and every January 1 thereafter, the minimum wage will be adjusted for inflation - raised by either five percent or by the percentage change in the Consumer Price Index during the 12-month period preceding the previous September, whichever is less.

Effective January 1, 2015, the bill also would raise the maximum tip credit allowed, from the current $3.65 to one-half of the minimum wage (or $4.58 when this change first kicks in).

If the bill is signed, Vermont would become the sixth state to pass a law increasing the minimum wage this year, following Connecticut, Delaware, Maryland, Minnesota and West Virginia. Hawaii's legislature has also passed a bill; its governor praised the bill's passage but has not yet signed it.