Vermont Earned Sick Time Law: One Hour Per 52 Hours Worked, 40-Hour Cap and the One-Year Waiting Period
Vermont Earned Sick Time Law: One Hour Per 52 Hours Worked, 40-Hour Cap and the One-Year Waiting Period
This guide is informational content, not legal or tax advice. It summarizes Vermont's earned sick time statute as of 2026. Confirm current requirements with the Vermont Department of Labor, and consult a qualified Vermont employment attorney or CPA before you adopt or change a policy.
Vermont's earned sick time law requires most employers to let workers build up paid time off for their own health needs and for caring for family members. The core rule is short: under 21 V.S.A. § 482, an employee accrues at least one hour of earned sick time for every 52 hours worked. The parts that cause the most confusion are the optional caps, the waiting period and the exemptions, and this guide spends most of its time on those. The law was amended by 2023 Act 85, effective July 1, 2024, and again by 2025 Act 18, effective May 13, 2025, so older summaries may be out of date.
The Core Accrual Rule
An employee accrues not less than one hour of earned sick time for every 52 hours worked. Employers may be more generous than the minimum, but they cannot accrue at a slower rate. You may calculate accrual per pay period or quarterly. Pick the method that matches how your payroll system tracks hours, because the balance on each pay stub has to be right.
The statute measures hours worked, so you need a reliable record of hours for everyone who could be covered. Hourly staff already have that in a timekeeping system. For salaried or other non-hourly staff, confirm with the Department of Labor how hours should be counted before you set up tracking.
Who Counts as an Employee
Vermont does not use a headcount test. Under 21 V.S.A. § 481(5), an 'employee' for this purpose is a worker who averages at least 18 hours a week over a year. That averaging test matters most for part-time and variable-schedule staff, because a worker can fall above or below the line depending on how the year is measured.
The statute excludes several groups, including:
- Workers under 18 years old
- Employees of 20 weeks or fewer in a job scheduled for 20 weeks or fewer
- Per diem or intermittent workers
- Other categories listed in § 481(5)
Read the full exclusion list in § 481(5) before you sort your staff. Seasonal and on-call workers are where classification errors most often happen, so check each category against the statute text rather than relying on a summary.
There is no small-employer exemption in the statute. A two-person shop is covered on the same terms as a larger employer if its workers meet the definition. The one timing break for new employers is the first-year exemption covered below.
The 40-Hour Accrual Cap and the 40-Hour Use Cap
Vermont allows employers to limit both how much time builds up and how much can be used. Under 21 V.S.A. § 482(c), an employer may cap accrual at 40 hours in a 12-month period. Under § 483(c), the employer may also cap use at 40 hours in a 12-month period. These are two separate caps, and you can adopt either one, both or neither.
The math shows how the accrual cap works in practice. At one hour per 52 hours worked, a part-time employee who works 1,040 hours in a year accrues 20 hours, which stays under a 40-hour accrual cap. A full-time employee who works 2,080 hours accrues 40 hours, which reaches the cap exactly.
| Rule | Vermont rule (21 V.S.A.) | Employer choice? |
|---|---|---|
| Accrual rate | At least 1 hour per 52 hours worked | Floor, not optional (more generous accrual is allowed) |
| Accrual cap | 40 hours in a 12-month period (§ 482(c)) | Optional |
| Use cap | 40 hours per year (§ 483(c)) | Optional |
| Waiting period before use | Up to one year, during which time still accrues | Optional |
| Pay rate | Greater of normal hourly wage or minimum wage | Required |
| New employer exemption | One year after hiring first employee (§ 486) | Statutory, not elected |
The One-Year Waiting Period
An employer may require a waiting period of up to one year before an employee can use earned sick time. The key detail is that time still accrues during the waiting period. When the period ends, the employee can use the hours already built up, subject to any accrual cap you have adopted.
This option matters most for employers with high turnover or many new hires, because it keeps paid absences from starting before a worker has been on the job for a while. It is also the option employees notice most, so state the waiting period in your written policy and in the notice you give at hire. The waiting period restricts use, not accrual. That distinction matters when you explain the policy to a new hire.
How Earned Sick Time Is Paid
Earned sick time is paid at the greater of the employee's normal hourly wage or the minimum wage. For a worker who earns more than the minimum wage, the sick time rate is simply the normal hourly wage. Check your payroll setup so sick hours are paid at the correct rate and not at a flat minimum wage figure.
Group health insurance continues during any period of earned sick time use. Your benefits administrator should confirm that the employee's coverage does not lapse while they are out.
Permitted Uses
Under 21 V.S.A. § 483(a), employees may use earned sick time for:
- The employee's own illness or injury, including health care needs
- Caring for a family member
- Domestic violence, sexual assault or stalking needs
- A school or business closure for public health or safety reasons
Your written policy should list these uses. A policy that limits use to illness alone does not match the statute, and a policy that is silent on the other uses invites disputes.
Equivalent Paid Time Off
An employer that already offers paid time off can comply without a separate bank if that time can be used for the same reasons and at an equal or better rate (21 V.S.A. § 484). A general PTO bank works only if its use rules cover the § 483(a) purposes and its accrual and pay terms are at least as good as the statute. Compare your PTO policy line by line against § 483(a) before deciding whether you need a separate earned sick time bank.
Carryover, Separation and Payout
Unused earned sick time carries over from one year to the next. It is not paid out when employment ends unless the employer agrees to pay it out. Put that rule in your written policy so employees know it before they separate, and avoid creating an expectation of payout through informal promises.
The New Employer Exemption
A new employer is exempt for one year after hiring its first employee (21 V.S.A. § 486). The clock starts with the first hire, not with the date you form your business. A company that forms an LLC with the Secretary of State in January but hires its first employee in June is exempt through the following June. Mark that end date on your calendar, because after it passes the law applies in full.
Notice and Posting Requirements
Employers must post the Department of Labor's earned sick time notice and must tell each employee about the law at hire (21 V.S.A. § 483(j)). Keep a record showing you provided it. Because the statute was amended in 2025, confirm the current version of the notice with the Department of Labor before you post it.
Common Mistakes
- Assuming the 40-hour caps apply automatically. They are options, so your written policy has to adopt them.
- Reading the waiting period as a freeze on accrual. Time still builds up during the waiting period.
- Classifying part-time staff without running the 18-hour averaging test.
- Starting the new-employer exemption clock at formation instead of at the first hire.
- Assuming a generic PTO policy qualifies without comparing it with § 483(a) and § 484.
Related Law: Unpaid Family and Parental Leave
Act 32 of 2025 creates unpaid family and parental leave that applies at 10 and 15 employees. That is a separate obligation with its own thresholds. It does not replace earned sick time, and an employer near those counts should review both laws together.
Action Checklist
- Pull 12 months of hours for each worker and run the 18-hour averaging test.
- Decide whether to adopt the 40-hour accrual cap, the 40-hour use cap, both or neither.
- Decide whether to require a waiting period of up to one year.
- Confirm that payroll pays sick time at the greater of normal wage or minimum wage.
- Confirm that group health coverage continues during use.
- Compare any existing PTO policy against § 483(a) and § 484.
- Post the Department of Labor notice and provide it to each new hire.
- Calendar the end date of any new-employer exemption.
- Have an employment attorney review the written policy before it takes effect.
Where to Confirm the Rules
Read 21 V.S.A. §§ 481 to 486 directly, since this guide is a summary. Contact the Vermont Department of Labor for the required notice and any current guidance on the law. Businesses that withhold must register for a business tax account with the Vermont Department of Taxes at https://tax.vermont.gov/. Entity filing questions go to the Secretary of State's Business Services Division at https://sos.vermont.gov/business-services/.
Complex situations, including multistate staff, union agreements or a pending dispute, call for a qualified Vermont employment attorney. A CPA can help you set up accrual tracking and payroll records.
Disclaimer: This guide is informational content, not legal or tax advice. It reflects Vermont law as of 2026 and may not capture later amendments or agency guidance. Consult a qualified attorney or CPA before relying on it.