Vermont minimum wage set to climb to $14.91 on Jan. 1

The same adjustment will lift the tipped-worker minimum from $7.21 to $7.46.

Vermont’s hourly minimum wage will increase by 49 cents at the start of the new year, reaching $14.91 on Jan. 1, according to the Vermont Department of Labor. The same adjustment will lift the tipped-worker minimum from $7.21 to $7.46.

The change is automatic under state law. Vermont ties the wage floor to annual inflation, using the smaller of 5% or the rise in the Consumer Price Index measured from August to August. This year, the Bureau of Labor Statistics reported a 3.4% gain in the CPI-U, which produced the 49-cent increase. Last year’s adjustment was 41 cents, bringing the minimum wage from $14.01 to $14.42.

For a full-time worker putting in 40 hours a week, the new rate works out to roughly $1,000 more over a year. Even so, economists and labor officials say the effect may be limited in parts of the state where few people earn the minimum and other costs dominate household budgets.

Chris Winters, the deputy commissioner of the Vermont Department of Labor, said wages are only one piece of affordability and argued that taxes, housing and health care matter more to workers’ finances. Dartmouth College economics professor Patricia Anderson said the increase is unlikely to change much in the Upper Valley, where relatively few workers are paid at that level.

The wage schedule has been updated this way since the law now in effect was adopted in 2020, after the Vermont Legislature overrode Gov. Phil Scott’s veto. That measure raised the minimum wage to $12.55 by 2022 and then restored yearly inflation-based increases.

Business groups have long argued that higher wage floors can raise labor costs and may force employers to reduce hiring or trim benefits. Anderson said research often shows a balancing act: larger jumps can help workers who keep their jobs while affecting some job opportunities elsewhere. She noted that the 49-cent increase is modest and unlikely to create major disruption, though some smaller employers in rural areas may respond cautiously.

Vermont’s new wage will still leave the state below most of New England. Connecticut, Maine, Massachusetts and Rhode Island all require at least $15 an hour, while New Hampshire remains tied to the federal minimum of $7.25. Nationally, Vermont ranked 19th among states with minimum-wage laws as of Jan. 1, 2026, and was one of 19 states that automatically adjust for inflation.

Even with the new rate, state and private research shows that basic living costs remain well above the wage floor. The Massachusetts Institute of Technology’s Living Wage Calculator estimates a single adult in Vermont needs $24.92 an hour to cover essentials. The Joint Fiscal Office placed the state’s livable wage for 2024 at $19.53 in urban areas and $17.68 in rural areas, while the Public Assets Institute said in its 2025 State of Working Vermont report that wage growth has lagged behind rising costs.

Those gaps are especially visible in the Upper Valley, where employers commonly advertise pay above the minimum. Job listings have shown openings at King Arthur Baking Co. in Norwich starting at $18.04 an hour and at Abracadabra Coffee Co. in Woodstock starting at $15 plus tips. In 2025, 10% of Vermonters earned $15 an hour or less.