News Releases

December 28, 2007

State Reminds Employers Minimum Wage Going Up

New Law Says Tipped Workers Must Get Raise, Too

MONTPELIER, Vt. – Vermont’s lowest paid workers, including wait staff and others who rely on tips for part of their pay, will see more in their paychecks after New Year’s Day.

That’s because Vermont’s minimum wage will increase from $7.53 per hour to $7.68 per hour on January 1, 2008.

The Vermont Department of Labor is reminding employers of the changes in an effort to avoid any problems with workers’ first paychecks.

“This is important, especially for ‘service and tipped’ employees because for first time since 2005 their basic wage rate is also increasing from $3.65 to $3.72 per hour,” said Vermont’s Labor Commissioner, Patricia Moulton-Powden.

Vermont’s minimum wage increases at the same rate as the August Consumer Price Index (CPI) each year. The CPI increased by two percent.

Legislation signed by Governor Jim Douglas earlier this year also ties basic wages for tipped employees to the CPI. Service or tipped employees are individuals working in hotels, motels, restaurants, or other businesses who customarily and regularly receive more than $120.00 per month in tips for direct and personal service.

Tipped employees’ total earnings during a pay period must equal or exceed $7.68 per hour. If a combination of tips and the basic wage do not meet that requirement, the employer must make up the difference.

“Between 16,000 and 20,000 Vermonters receive minimum wage or are service employees who receive part of their compensation through tips,” Moulton-Powden said. “These workers are the most vulnerable to rising gasoline and home heating fuel prices, and this can help ease that burden.”

In January 2008 the minimum wage in neighboring states will range from a high of $8.00 in Massachusetts to a low of $6.50 in New Hampshire. Vermont’s minimum wage is the second highest in the region.

Anyone with questions about the minimum wage may visit the Department of Labor online at www.labor.vermont.gov or contact the Department of Labor, Wage and Hour program at (802) 828-0267.

Source: Department of Labor
Last Updated at: December 28, 2007 13:19:03