Vermont Governor Philip Scott on June 4, 2024 signed into law H.704, a pay transparency requirement mandating employers with five or more employees to include wage ranges in job advertisements, effective July 1, 2025. The Office of the Vermont Attorney General will publish guidance with additional information about the law on or before January 1, 2025.
In passing H.704, Vermont joins a growing number of states that have passed similar requirements in recent years, including California, Colorado, Hawaii, Illinois, Maryland, New York, Minnesota, and Washington, DC.
The new law requires covered Vermont employers to disclose in each job advertisement the compensation or range of compensation for the position.
The legislation defines “range of compensation” as the good faith expectation of the minimum and maximum annual salary or hourly wage range for the position.
The law requires that any advertisement for a job opening that is paid on a commission basis, whether in whole or in part, includes a statement that because the job is partially paid on a commission basis, the employer is not able to post an expected minimum and maximum salary or wage range. The law also requires that any advertisement for a job paid on a tipped basis must disclose that fact and also state the base wage or range of base wages for the position. “Base wage” is defined as the hourly wage that the employer pays to a tipped employee, not including any tips received by the employee.
For purposes of the law, an “advertisement” is defined as any written notice, “in any format,” of a specific job opening that is made available to potential applicants. Under the law, an “advertisement” does not include (1) general announcements that notify potential applicants that employment opportunities may exist with the employer, but do not identify any specific job openings, or (2) verbal announcements of employment opportunities that are made in person or on the radio, television, or other electronic mediums.
The law applies to any position for which the employer is hiring, including positions that are open to internal or external candidates—or both—and positions into which current employees can transfer or be promoted. H.704 will not require that an employer create an advertisement for every opening. However, the law will require employers to include pay information on advertisements the company does create and make available to multiple potential applicants.
The law also does not require that employers include on job postings information about benefits or discretionary compensation that the candidate may be eligible to receive if hired.
The law applies to all employers, including any “individual, organization, or governmental body including any partnership, association, trustee, estate, corporation, joint stock company, insurance company, or legal representative,” that employ five or more employees. The law does not specify whether the five-employee minimum includes employees located outside of Vermont.
The law applies to any job posting for a position that is 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.” Accordingly, the law does not apply to any position that is physically located outside of Vermont and that performs work that is predominantly for one or more offices or work locations that are physically located outside of Vermont.
The law contains an express provision making clear that employers are not prohibited from hiring an employee for more or less than the range of compensation or range of base wages contained in the job advertisement “based on circumstances outside of the employer’s control, such as an applicant’s qualifications and labor market factors.”
The law does not contain a private cause of action. Rather, the Attorney General’s Office or a State’s Attorney’s Office may enforce the provisions of this law pursuant to the provisions of 21 V.S.A. § 495b(a)(1) by restraining prohibited acts, seeking civil penalties, obtaining assurances of discontinuance, and conducting civil investigations in accordance with the procedures established in 9 V.S.A. §§ 2458-2461. Employers may be required to pay civil penalties or restitution of wages to an employee for any violations. It is a violation for an employer to retaliate against—including refusing to interview, hire, promote, or employ—a current or prospective employee for asserting any rights under this law.
By January 1, 2025, the Attorney General’s Office will publish on its website guidance for employers and employees regarding the new law.
In advance of the July 1, 2025 effective date, covered employers should review all public and internal-facing job postings and advertisements to ensure these materials include the required wage information. Covered employers also should consider contacting any recruiters or third-party agencies that post job opportunities on the employer’s behalf to ensure they are aware of the law and will comply with its requirements.
Finally, multistate employers should confirm the company’s compliance with pay transparency laws in other states and localities.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following: