By Journey Payroll & HR Compliance Team

At a Glance

• State overtime statute: Yes. 21 V.S.A. Section 284(b), Vermont Statutes Annotated
• State overtime threshold: 40 hours in a workweek, at 1.5x the regular wage rate
• Employer coverage: Two or more employees (smaller than the FLSA $500,000 enterprise threshold)
• Daily overtime requirement: None
• 7th-day premium pay rule: None
• Salary threshold for exemptions: Federal level, $684 per week ($35,568 annually), confirmed by DOL technical amendment effective May 15, 2026
• Vermont minimum wage (2026): $14.42 per hour (effective January 1, 2026, per 21 V.S.A. Section 384(a)(1))
• State enforcement agency: Vermont Department of Labor, Wage and Hour Program
• Willful violation penalty: Up to twice the amount of unpaid wages (effective July 1, 2025, under Vermont law)
• Statute of limitations: 2 years for Vermont wage claims; FLSA is 2 years (non-willful) or 3 years (willful)
• Record retention: 7 years recommended (Vermont requires at least 2 years under Vermont DOL rules; FLSA minimum is 3 years under 29 C.F.R. Section 516.5)

Who This Applies To

This page covers private employers in Vermont with two or more employees on payroll, including full-time, part-time, and temporary workers. It applies to employers headquartered outside Vermont if they have Vermont-based employees. Federal contractors may have additional obligations under prevailing wage laws, the Davis-Bacon Act, and the Service Contract Act. The Vermont overtime statute applies to employers of two or more employees regardless of annual gross revenue, which is a broader trigger than the FLSA’s $500,000 enterprise coverage threshold. Smaller Vermont employers below the FLSA enterprise threshold who are not otherwise engaged in interstate commerce may be covered by Vermont state law but not by the FLSA. Most Vermont employers of any meaningful size are covered by both.

How Vermont Overtime Compares to Federal FLSA

Vermont is not a pure federal-law state on overtime. It has its own overtime statute, 21 V.S.A. Section 384(b), which independently requires employers to pay overtime for hours worked over 40 in a workweek. The state threshold and rate, 40 hours and 1.5x the regular wage rate, match the FLSA. But several features of Vermont’s law differ from federal law in ways that matter for employers.

First, coverage is broader. Vermont’s overtime statute applies to employers with two or more employees, a lower threshold than the FLSA’s enterprise coverage test. A small Vermont employer with five workers and annual revenues of $300,000 who is not involved in interstate commerce would not be covered by the FLSA but is covered by 21 V.S.A. Section 384(b). That employer owes state overtime to its employees.

Second, the exemption structure differs. Vermont’s state-specific exemptions under 21 V.S.A. Section 384(b) list particular categories of employers and employees excluded from the state overtime requirement. Those categories overlap with but are not identical to the FLSA’s exemptions. Critically, an employee who is exempt from Vermont state overtime may still owe overtime under the FLSA if the employer meets federal enterprise coverage. Vermont law explicitly notes that employees exempted under state law may still be entitled to overtime under federal law. Employers covered by both must apply whichever law gives employees the greater protection.

Third, Vermont’s penalty structure for willful violations is state-specific. Effective July 1, 2024, Vermont law provides that willfully withheld wages may result in the employer owing up to twice the unpaid amount, with the additional recovery split evenly between the employee and the state’s administrative and collection costs.

Daily Overtime Requirements

Vermont has no daily overtime requirement. Under 21 V.S.A. Section 384(b), overtime is triggered only by hours worked in excess of 40 in a workweek. An employee who works 10 or 12 hours in a single day is not owed any overtime premium under Vermont or federal law unless total workweek hours exceed 40. Vermont did not adopt a daily overtime trigger when it enacted its state overtime statute, and no subsequent legislation has added one.

This is a meaningful distinction from California, which requires overtime for hours worked beyond 8 in a day and double time for hours beyond 12. Nevada requires daily overtime for employees earning below a wage threshold. Alaska requires daily overtime beyond 8 hours. None of those rules apply in Vermont. A Vermont healthcare employer running 12-hour nursing shifts owes overtime only when total weekly hours exceed 40, not on the within-shift hours beyond 8. Vermont’s new healthcare mandatory overtime restrictions effective July 1, 2026, limit when employers can require nurses to work overtime, but they do not create a daily overtime pay requirement beyond 21 V.S.A. Section 384(b)’s weekly trigger.

Weekly Overtime Threshold

Vermont’s overtime threshold under 21 V.S.A. Section 384(b) is 40 hours in a workweek. Every hour worked beyond 40 by a non-exempt employee must be compensated at no less than 1.5 times the employee’s regular wage rate. A workweek is a fixed, regularly recurring 168-hour period. Hours cannot be averaged across multiple workweeks to avoid or reduce overtime liability.

Vermont’s statute uses the phrase ‘regular wage rate,’ which functions the same as the FLSA’s ‘regular rate of pay.’ It must include all compensation paid for work in the workweek beyond the explicitly excluded categories. Non-discretionary bonuses, shift differentials, piece-rate pay, and most other forms of compensation must be included in the regular wage rate calculation before the overtime multiplier is applied. Vermont’s healthcare, manufacturing, and hospitality sectors routinely use pay structures that require careful regular rate calculations, including shift differentials for overnight or weekend shifts and non-discretionary productivity bonuses.

7th-Day Premium Pay Rules

Vermont has no 7th-day premium pay rule. Working on the 7th consecutive day of a workweek does not trigger any premium pay obligation in Vermont beyond what the weekly hour total requires. If a Vermont employee works 7 consecutive days but logs 38 total hours, no overtime is owed under state or federal law. If those 7 days total 48 hours, overtime is owed on the 8 hours beyond 40, but not at any special 7th-day rate.

California’s 7th-day rule under California Labor Code Section 510, requiring 1.5 times the regular rate for the first 8 hours on the 7th consecutive workday and double time for hours beyond 8, is a California-specific rule. It has no application to Vermont employees and does not travel with California-based employers who have Vermont remote workers.

Exempt Employee Salary Threshold in Vermont

Vermont does not set its own salary threshold for overtime exemptions that differs from the federal level. The operative threshold for executive, administrative, and professional exemptions is the federal standard: $584 per week ($35,568 annually) under 29 C.F.R. Part 541. This was confirmed by the DOL’s technical amendment published May 15, 2026, which formally restored the 2019 regulatory thresholds after federal courts vacated the 2024 rule that had attempted to raise the level. The $684 per week figure is now settled in the Code of Federal Regulations with no pending changes.

Vermont’s state overtime statute at 21 V.S.A. Section 384(b) exempts certain categories of employees from its requirements, including executive, administrative, and professional employees, but the salary threshold for those categories follows the federal FLSA standard rather than a separate Vermont-specific number. For employers covered by both state and federal law, the federal three-part test (salary basis, salary level, duties) applies. Vermont does not impose a higher threshold.

The HCE threshold is $107,432 in total annual compensation, with at least $684 per week paid on a salary or fee basis, also restored to 2019 levels by the May 2026 DOL amendment. Vermont has no separate state HCE threshold.

Exemptions Under Vermont Law

Vermont’s overtime exemptions are defined at 21 V.S.A. Section 384(b) and differ in several respects from the FLSA exemption list. Employers covered by both Vermont law and the FLSA must apply the law that gives employees the greater benefit. An employee who is exempt from Vermont state overtime may still owe overtime under federal law, and vice versa.

Retail or Service Establishments

Under 21 V.S.A. Section 384(b), employees of retail or service establishments where 75 percent or more of annual sales are not for resale and qualify as retail in the industry are exempt from the Vermont state overtime requirement. This is a Vermont-specific exemption that differs from the FLSA’s retail exemption criteria. Importantly, employers meeting FLSA enterprise coverage still owe federal overtime to these employees even if they qualify for the Vermont state exemption. Smaller Vermont retailers below FLSA coverage thresholds may rely on this state exemption more fully.

Amusement and Recreational Establishments

Employees of amusement or recreational establishments that operate 7 months or fewer per year, or whose receipts during any 6-month period are not more than one-third of their receipts during the other 6 months of the prior year, are exempt from Vermont state overtime under 21 V.S.A. Section 384(b). Vermont’s ski resorts, summer camps, and seasonal outdoor recreation operations should evaluate this exemption carefully based on their specific operating period and revenue pattern. FLSA coverage still applies if the employer meets federal enterprise thresholds.

Transportation Businesses

Employees of a business engaged in the transportation of persons or property to whom the FLSA overtime provisions do not apply are exempt from Vermont state overtime under 21 V.S.A. Section 384(b)(5). This exemption tracks the federal motor carrier exemption at 29 U.S.C. Section 213(b)(1): employees to whom federal overtime does not apply are also exempt from Vermont state overtime. The statute specifically notes that all other employees of such transportation businesses remain covered by the Vermont overtime requirement.

Public Sector Employees

Employees of political subdivisions of Vermont, state employees covered by the FLSA, and permanent employees of the Vermont General Assembly are exempt from the Vermont state overtime statute under 21 V.S.A. Section 384(b)(6), (7), and (8). These employees may still be entitled to overtime under applicable federal or collective bargaining frameworks.

Executive, Administrative, and Professional Employees

Vermont’s overtime statute, consistent with the FLSA framework, exempts bona fide executive, administrative, and professional employees who satisfy the three-part federal test: salary basis, salary level ($684 per week), and the applicable duties test under 29 C.F.R. Part 541. Vermont does not apply a separate or more demanding duties test than the federal standard.

Calculating Overtime Pay Correctly

Vermont overtime calculations follow the same framework as the FLSA: regular wage rate multiplied by 1.5 for every hour over 40 in the workweek. The most common errors involve the regular wage rate calculation and the failure to include non-discretionary additional pay.

Step 1: Define the Workweek

Establish a fixed, recurring 168-hour workweek with a defined start day and time, documented in writing. The workweek cannot be changed to avoid overtime, and hours cannot be averaged across workweeks.

Step 2: Calculate the Regular Wage Rate

Total all compensation earned in the workweek: base hourly wages, non-discretionary bonuses, shift differentials, and piece-rate pay. Divide by total hours worked. Exclude only payments specifically excluded under FLSA Section 207(e), such as discretionary bonuses and true expense reimbursements. The result is the regular wage rate for that workweek.

Step 3: Apply the Overtime Premium

For each hour worked beyond 40, the employer owes an additional 0.5 times the regular wage rate as the overtime premium. If all hours including overtime hours were already paid at straight time, only the 0.5x half-time premium is owed on top. If overtime hours have not been paid at all, the full 1.5x rate applies.

Example: Burlington Hospitality Worker with Shift Differential

A Burlington hotel housekeeper earns $14.42 per hour (the 2026 Vermont minimum wage) and works 44 hours in one week, including 8 hours on an overnight shift that pays a $2 per hour shift differential. Straight-time compensation: (36 x $14.42) + (8 x $16.42) = $519.12 + $131.36 = $650.48. Regular wage rate: $650.48 divided by 44 hours = $14.78 per hour. Overtime premium on 4 hours: 4 x ($14.78 x 0.5) = 4 x $7.39 = $29.56. Total pay: $650.48 + $29.56 = $680.04. An employer who computed overtime on the base $14.42 rate alone would pay 4 x ($14.42 x 0.5) = $28.84, underpaying by $0.72 for that week. Compounded across many employees and many weeks, the gap creates Vermont and FLSA liability.

Enforcement: Who Oversees Overtime in Vermont

The Vermont Department of Labor, Wage and Hour Program is the primary state enforcement agency for 21 V.S.A. Section 384(b) overtime violations. Employees may file a wage complaint with the Vermont DOL at labor.vermont.gov or call (802) 828-0267. The Vermont DOL investigates complaints, may conduct employer audits, and can order payment of back wages and penalties. Effective July 1, 2025, Vermont law allows the state to recover up to twice the amount of willfully withheld wages, with the additional recovery split evenly between the employee and the state.

The U.S. Department of Labor Wage and Hour Division (WHD) handles FLSA overtime violations in Vermont in parallel with the Vermont DOL. Employees may file a federal complaint at dol.gov or call 1-866-4-USWAGE. The WHD Boston Regional Office serves Vermont. For employers covered by both Vermont and federal law, employees may pursue remedies under both frameworks, though double recovery for the same violation is not permitted. Vermont’s statute of limitations for wage claims is 2 years. The FLSA allows 2 years for non-willful violations and 3 years for willful violations under 29 U.S.C. Section 255(a).

Penalties for Overtime Violations in Vermont

Vermont’s willful violation penalty is a meaningful state-specific consequence: effective July 1, 2025, an employer found to have willfully withheld wages must pay up to twice the amount owed, with the additional recovery beyond the base wages split evenly between the employee and the state’s administrative costs. This is in addition to, not instead of, the back wages owed. Under the FLSA, employers who violate federal overtime requirements owe the full unpaid amount plus an equal amount in liquidated damages under 29 U.S.C. Section 216(b), automatically, unless they prove good faith, plus mandatory attorney’s fees. The DOL may additionally assess up to $1,100 per willful or repeated FLSA violation under 29 U.S.C. Section 216(e)(2). Vermont employers face exposure under both state and federal penalty frameworks for the same underlying overtime violation.

Frequently Asked Questions

What is overtime law in Vermont?

Vermont has its own state overtime statute at 21 V.S.A. Section 384(b), which requires employers with two or more employees to pay non-exempt workers at least 1.5 times their regular wage rate for all hours worked over 40 in a workweek. This mirrors the federal FLSA weekly threshold but applies independently under Vermont state law. Vermont has no daily overtime requirement and no 7th-day premium rule. The state overtime statute was most recently updated as part of the 2025 session of the Vermont General Assembly.

Does Vermont require daily overtime?

No. Vermont has no daily overtime requirement. The Vermont overtime statute at 21 V.S.A. Section 384(b) is triggered only by hours worked over 40 in a workweek. Unlike California, Nevada, and Alaska, which require overtime for hours worked beyond 8 in a single day, Vermont imposes no daily premium obligation.

Does Vermont have a 7th-day overtime rule?

No. Vermont has no 7th-day premium pay rule. An employee who works 7 consecutive days does not automatically owe any premium for the 7th day unless total workweek hours exceed 40. California’s 7th-day rule under Labor Code Section 510 does not apply to Vermont employees.

What is the overtime exemption salary threshold in Vermont?

Vermont follows the federal salary threshold of $684 per week ($35,568 annually) for executive, administrative, and professional exemptions, confirmed by the DOL’s technical amendment published May 15, 2026. Vermont does not set a higher or separate state threshold. Satisfying the salary threshold alone is not sufficient: the employee must also pass the applicable FLSA three-part duties test.

How does Vermont’s overtime law differ from federal FLSA?

Vermont’s 21 V.S.A. Section 384(b) differs from the FLSA in three key ways. First, it covers employers with two or more employees, reaching smaller employers that fall below FLSA enterprise coverage. Second, its state-specific exemptions, including the retail establishment exemption and the transportation exemption, differ in scope from the corresponding FLSA categories. Third, Vermont’s willful violation penalty, effective July 1, 2025, allows recovery of up to twice the unpaid wages, with the extra amount split between the employee and the state, which is a different structure from the FLSA’s automatic liquidated damages provision.

Who enforces overtime violations in Vermont?

The Vermont Department of Labor, Wage and Hour Program enforces 21 V.S.A. Section 384(b) and handles state wage complaints at labor.vermont.gov or (802) 828-0267. The U.S. Department of Labor Wage and Hour Division (WHD), Boston Regional Office, enforces FLSA overtime violations and can be reached at dol.gov or 1-866-4-USWAGE. Vermont’s statute of limitations for state wage claims is 2 years. The FLSA allows 2 years for non-willful violations and 3 years for willful violations.

Do small Vermont employers with fewer than five workers owe overtime?

Yes, if they employ two or more employees. Vermont’s overtime statute at 21 V.S.A. Section 384(b) covers employers with two or more employees, regardless of annual gross revenue. A Vermont employer with three or four workers who falls below the FLSA’s $500,000 enterprise coverage threshold and is not otherwise covered by the FLSA individually still owes state overtime to eligible employees under Vermont law. Small employers cannot use the absence of federal FLSA coverage as a reason to avoid overtime obligations in Vermont.

Multi-State Employer Considerations

Vermont’s state overtime statute creates a compliance layer that does not exist in pure federal-law states like Texas, Florida, or South Dakota. Multi-state employers who apply a uniform overtime policy calibrated to FLSA rules must verify that Vermont’s state-specific exemptions, coverage threshold, and penalty provisions are reflected correctly for Vermont employees.

Employers headquartered in Vermont with workers in other states must apply each state’s overtime rules at the employee’s work location. Vermont’s broader coverage threshold and exemption structure do not travel to other states. Conversely, California employers with Vermont remote workers do not owe California’s daily overtime or 7th-day premium for Vermont hours. Journey Payroll & HR manages multi-state payroll compliance across all 50 states, including employers with Vermont employees alongside workers in states with both more and less stringent overtime frameworks. [INTERNAL LINK: multi-state payroll services — Services / Multi-State Payroll]

About Journey Payroll & HR

Journey Payroll & HR was founded in 2010 by Kevin Welch and is headquartered in Northern Colorado. Journey serves small and mid-sized businesses across all 50 states, including employers with employees in Vermont, and operates as a franchise model with owners in multiple states. Journey is recognized on BizWest’s Mercury 100 list.

What to Do Next

If you have Vermont employees, confirm that your overtime calculation includes all non-discretionary bonuses and shift differentials in the regular wage rate, not just base hourly pay. Verify that you are applying Vermont’s employer coverage threshold correctly: if you have two or more Vermont employees, state overtime applies regardless of your FLSA enterprise coverage status. Review your exempt employee classifications against Vermont’s state-specific exemption categories, not just the FLSA list, and verify that both tests are satisfied where both laws apply. Journey Payroll & HR can help you configure compliant overtime calculations for Vermont and every other state where you have employees. [INTERNAL LINK: contact Journey — Contact / Get Started]

Related Pages

• Vermont Payroll & HR Compliance: State Hub [INTERNAL LINK: Vermont state hub — States / Vermont]
• Federal Overtime Rules: What Employers Need to Know [INTERNAL LINK: federal overtime — Wage and Hour / Federal Overtime]
• Overtime Laws in Utah: What Goes Beyond Federal FLSA [INTERNAL LINK: Utah overtime — States / Utah / Overtime Laws]
• Overtime Laws in Texas: What Goes Beyond Federal FLSA [INTERNAL LINK: Texas overtime — States / Texas / Overtime Laws]
• California Overtime Laws: Employer Requirements [INTERNAL LINK: California overtime — States / California / Overtime Laws]
• Vermont Final Paycheck Laws [INTERNAL LINK: Vermont final paycheck — States / Vermont / Final Paycheck Laws]
• Vermont Minimum Wage Laws [INTERNAL LINK: Vermont minimum wage — States / Vermont / Minimum Wage]

About This Page

This page is written and maintained by the Journey Payroll and HR Compliance Team. Our team monitors federal and state employment law on an ongoing basis to keep this information current for employers across all 50 states.

Legal Disclaimer

The information on this page is provided for general compliance reference purposes and reflects our understanding of applicable law as of the date this page was last updated. It is not legal advice and does not create an attorney-client relationship. Employment laws change frequently and vary by jurisdiction, industry, and employer size. Specific facts and circumstances affect how laws apply to your situation. For guidance on your particular circumstances, consult a qualified employment attorney licensed in your state.

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Reviewed by Journey’s Compliance Team. Last Updated: 5/29/26

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