Vermont - The Newest State to Join in on Pay Transparency

On June 4, 2024, Vermont Governor Phil Scott signed H.704 into law which will make Vermont the newest state to require pay transparency on job postings. The law will go into effect July 1, 2025. Below is a detailed summary of the new law:

Covered Employers: Employers with 5 or more employees are required to comply with this law.

Salary Range Disclosure: Employers are required to include the compensation or range of compensation on the job advertisements for positions that are either physically located in Vermont or a remote position that will predominantly perform work for an office or work location that is physically located in Vermont. This includes advertisements for positions that are open to internal and/or external candidates, and positions in which current employees can be transferred or promoted into. An advertisement is defined as a “written notice, in any format, of a specific job opening that is made available to potential applicants” and the law mentions that general announcement of there being upcoming employment opportunities or verbal announcements of employment opportunities are not included in this definition.

Exceptions: There are a couple of exceptions that are specified within the law. First, advertisements for a job that is primarily commission based, whether in whole or in part, are required to disclose that they are commission based and are not required to disclose the compensation or range of compensation. Second, advertisements for a job that is paid on a tipped basis should disclose that the compensation is based on tips and disclose the base wage or range of base wages for the job.

Next Steps: Vermont employers have a little over a year to start preparing for this new law, since it goes into effect in July of 2025. Employers will need to discuss this law with counsel to understand whether they are required to comply and determine the best strategy for complying. We recommend that employers without a compensation structure should consider undergoing the process of creating one and Berkshire can assist with this effort. With more transparency comes the potential of employees asking more compensation-related questions and comparing their pay to one another and new hires, so now is also a great time to start thinking about conducting a Pay Equity review.