More States Adopt Wage Transparency Mandates, Vermont Latest to Join

Just a few weeks ago, we reported that Maryland passed a law requiring employers to disclose certain wage information for their job postings. (If you missed it, read about it here: Shining a Light on Pay: Maryland Employers Embrace Wage Transparency Mandates.)

With the passage of H.704, Vermont has recently joined Maryland and a host of other states toward the trend of wage transparency. This law will take effect July 1, 2025.

Applicability

The new law applies to all employers with five or more employees. Notably, the law applies to both positions of employment located in Vermont and remote positions where the employee “will predominantly perform work for an office or work location that is physically located in Vermont.”

The law applies to job advertisements, broadly defined to include a “notice in any format, of a specific job opening that is made available to potential applicants.” The definition excludes general announcements that do not identify a specific job opening and announcements of employment opportunities made in person, on the radio, television, or “other electronic means,” which may include general “We’re Hiring” social media posts.

Requirements

Once the law goes into effect, employers will be required to disclose the compensation or range of compensation for every advertised job posting. The law defines compensation range as the “minimum and maximum annual salary or hourly wage for a job opening” expected “at the time the employer creates the advertisement.” The disclosure requirements apply to all job openings, whether external or internal, including those internal postings that pertain to transfers or promotions.

Where the job advertisement is for a position paid on a tipped basis, an employer is required to disclose that the position is of that nature and either the base wage or the range of base wages for the position. The law defines the “range of base wages” as the “minimum and maximum base wages for a job opening” expected “at the time the employer creates the advertisement.” Employers are not required to disclose the anticipated tip range.

Excluded from the law’s disclosure mandates are postings related to a job paid by commission. For those postings, employers are solely required to identify that the pay is commission-based.

In any cases where the law mandates wage disclosures, the employer must set the compensation, compensation range, base wage, or base wage range in good faith. Employers are permitted to hire an employee for more or less than the compensation or base wages listed in a job advertisement based on “circumstances outside of the employer’s control.” Those circumstances may include an applicant’s qualifications or labor market factors.

Unlike other states tackling wage transparency, Vermont does not require employers to include the benefits associated with the advertised position.

Guidance from the Vermont Attorney General’s Office will be published before January 1, 2025.

Retaliation Protections

An employer violates the law if it refuses to interview, hire, promote, or employ a current or prospective employee for asserting or exercising any rights provided by the law.

Consequences for Violations

The Vermont Attorney General or state’s attorney may enforce violations of the law; there is no private right of action like in other provisions of the Fair Employment Practices Act, which the law incorporates for enforcement. Employers found to have violated the law may be ordered to pay restitution of wages or other benefits and other relief.

Conclusion

Vermont employers should initiate the collection of wage ranges for each position within their company, including remote positions that will be substantially performed out of Vermont. This step is crucial before the obligation to disclose such information in job postings becomes effective in less than a year. Employers subject to this requirement should also commence training their hiring departments to ensure that staff handling job postings are well-versed in relevant laws and equipped with systems to maintain accurate records.

Buchanan’s labor and employment attorneys diligently monitor updates on challenges to the final regulation and stand ready to address any inquiries regarding your company’s practices and policies.