The 2023 legislative session has concluded, including the veto session in which the Democratic supermajority wielded its power by overriding five bills vetoed by Vermont’s republican governor, Phil Scott; including the $8.5 billion state budget, as well a .44% payroll tax on all working Vermonters to increase childcare subsidies for families making less than $172,000 per year. Employers will be required to pay at least 75% of the tax which will take effect July 1, 2024. The tax is expected to raise $120 million.
Tax payers will see an average increase of 4% and the non-homestead tax rate in 2024 from 1.388 to 1.391 per $100 of equalized education property value, not because of increased taxes but because of increased property values as well as passage of legislation that will make universal school meals a permanent program.
Labor issues, including a mandatory paid family leave program (H.66) and bills that would make it easier for employees to unionize and hinder employers in requiring that employees participate in certain mandatory staff meetings failed to make it past all stages of passage this year, but will be considered in 2024. However, H.135 was passed and signed by the Governor, which will make it mandatory for employers that do not currently offer a retirement plan to enroll all employees into the Green Mountain Secure Retirement Plan (S.135). This is an opt-out program for employees, and employers are prohibited from contributing to these plans, while employees that are automatically enrolled will see a 5% decrease from their paycheck which will be allocated to their retirement account. The program will begin with employers with more than 25 employees in 2025 and businesses with more than five employees will need to begin enrollment in 2026. VRGA offers an alternative to the state-run program, which you can learn more about here. This program, managed through Lincoln Financial provides you more flexibility and control over the benefits that are available to your employees.
VRGA has compiled a list of bills relevant to the membership, their status, and the changes they create below. Bills are organized by category in the dropdown menu below. If you have questions regarding any of these bills, or other issues not reported on, please contact Erin at erin@vtrga.org.
H.66, Paid family and medical leave was a top priority, along with universal childcare, for the House at the beginning of the legislative session. More than 100 Democrats signed onto H.66, which if passed would have been the most generous paid family and medical leave program in the country. The House’s version, which passed 99-32 and will be considered in 2024 by the Senate, will cost more than $111 million for initial setup and nearly $100 million annually to provide employees 12 weeks of paid leave at 90% of the state average weekly wages ($1,135 per week max). Eligible employees can use the leave for their own health, the care of a family member, parental leave, or safe leave. Employees have the ability to take up to two of those 12 weeks for bereavement leave as well. In order to pay for the program, H.66 would require a .55% payroll tax, split evenly between the employer and employee.
The Senate, who’s main priority in 2023 has been improving access to childcare, has expressed significant support for a paid leave program. We expect major discussions surrounding a mandatory paid family and medical leave program in 2024.
Meanwhile, the Governor’s voluntary paid family and medical leave program for state employees, managed by The Hartford, will begin its first phase on July 1, 2023 with the option for non-state employers to enroll employees beginning July 1, 2024.
S.135, VT Saves, a mandatory enrollment retirement plan will become law. Launched in 2021 as a public option for employees that wanted to participate in a retirement plan, the Green Mountain Secure Retirement Plan, a voluntary ERISA-covered public retirement plan, struggled to garner enrollment. As a result, the VT Saves Program has been established after swift passage of the bill through both the Senate and the House as well as signed into law by Governor Scott.
Beginning July 1, 2025, it will be mandatory for all covered employers with 25 or more covered employees that do not offer a retirement plan to enroll all employees into the plan. Businesses with more than five employees will need to begin enrollment in 2026. Employees will have the ability to increase or decrease the amount of savings or opt out of the program. While employers are required to enroll employees into the plan, they are prohibited by law from contributing to the plans.
VRGA offers an alternative to the state-run program, which you can learn more about here. This program, managed through Lincoln Financial provides you more flexibility and control over the benefits that are available to your employees.
Workers Compensation and Unemployment Insurance Various unemployment insurance and workers compensation bills were introduced at the beginning of the 2023 legislative session, but a majority remain unconsidered, including
H.144 exempting unemployment compensation benefits from income taxation for those earning less than $125,000 per year
H.92 establishing additional instances in which an employee who voluntarily separates from employment may be eligible for unemployment insurance benefits.
Captive Audience, Card Check, Severe and Pervasive Standard and Elimination of No Rehire Two major labor bills were introduced in the Senate Economic Development, Housing and General Affairs Committee one week before the all-important crossover deadline, the deadline by which bills need to be passed out of their committee of jurisdiction in order to be considered by the other chamber. Many business organizations in the building suspected these late introductions were by design to limit the time in which stakeholders could weigh in. As introduced, the bills would have ended Vermont’s at-will employment status, required employers to provide severance pay to terminated employees, banned noncompete agreements and allowed for the creation of a card check program - allowing for employees to unionize without an election.
While S.102, the bill known as the “captive audience” bill, did not pass, it will be considered in 2024. S.102 would change the language in statute surrounding what meetings employers can require employees to attend. Employers would be banned from requiring employees participate in discussions surrounding religious or political matters. Given discussions today, meetings surrounding diversity, equity, inclusion, accessibility would be considered political matters.
The bill also alters current law in a way that organizers can side-step the voting process by allowing the “card check” method rather than an election. A similar bill that was passed in CT is currently being litigated. Business community organizations continue to monitor and keep in touch regarding the bill.
S.103 has passed and has been sent to the Governor. It is unclear whether he will veto the bill or allow it to become law without his signature. The bill will eliminate the severe and pervasive standard surrounding claims made by an employee. This strays from standard laws and would eliminate the courts ability to consider all circumstances surrounding a claim of harassment. The business community is concerned that claims will be made and litigation will be pursued instead of the typical HR intervention that is generally practiced now. With Vermont’s court system still slowed to a glacial pace, businesses cannot afford to have claims tied up in court when they can be handled at the HR or mediation level. Eliminating such a standard will further muddy the employment landscape. The bill also prohibits employers from disallowing employees to be rehired after termination due to settling a claim or violation against an employer.
H.158 - Bottle Bill
Tuesday’s veto session also included House passage of H.158, the expansion of the bottle bill. The bill, which failed to make it through all stages of passes prior to the end of the legislative session, will now be sent to the Governor to review. He has 10 days to decide whether he will sign it, allow it to be enacted without his signature, or veto the bill. If the Governor vetoes the bill, it will, without a doubt, be reintroduced in 2024 under a new bill title. H.158 proposes to establish a Producer Responsibility Organization that would be responsible for the oversight and management of Vermont’s redemption system and expand the scope of containers that would be included in the redemption system.
As reported by VPA lobbyist Matt Cota The legislature overrode Governor Scott’s veto of the "Affordable Heat Act” earlier this year. Sometimes called a Clean Heat Standard (and now officially known as Act 18 of 2023) the law is an attempt to get Vermonters to use less fossil fuel for heat, hot water and cooking. If fully implemented in two years, Vermont’s heating fuel sellers will have to sell less fuel or else pay someone else to get Vermonters to use less. The Vermont Public Utility Commission is now tasked with registering every fuel dealer and collecting data on every gallon that is purchased and sold. They will also create something called a “clean heat credit marketplace.” A credit will be awarded to a heating fuel or service company when something is done to reduce greenhouse gas emissions in the thermal sector. Nearly ever fuel dealer in Vermont will need them, but it isn’t known how many they'll need and how much they’ll cost. While the best guess is 70-cents a gallon, it could be twice as much. The work designing this policy begins immediately, but no payment is required by fuel dealers until the Vermont Legislature gives final approval in 2025. The state will now spend two years and nearly $2 million designing a credit marketplace. Renewable liquid, solid, and gaseous fuels may be able to earn credits under this system. A Technical Advisory Group (TAG) will be directed by the Public Utility Commission to conduct a lifecycle analysis on any energy product, appliance or service that can reduce greenhouse gas emissions. Click here to watch a one hour seminar from the 2023 Vermont Energy Conference called "Vermont's Affordable Heat Act...Explained."
Omnibus Liquor and Lottery Bill The perennial discussion surrounding various liquor matters has established the practice of expecting an omnibus bill with various technical and impactful changes each year. In 2023, multiple bills introduced were rolled into one - H.470, which was signed by Governor Scott. The legislation
replaces the term “cider” with “hard cider” to ensure clarity between alcoholic and non-alcoholic cider,
increases the annual limit on fourth-class licenses from 10 to 20,
continues the pandemic-era act that allowed alcohol-to-go for off-premise consumption
Reduces from 6 to 5 the number of sample drinks consumers can have from at sampling events
Clarifies that special event permits are valid for no more than 40 days
Makes changes surrounding the sampling event permit, now called limited event permit, and
Flavored Tobacco The bill that would have banned the sale of all flavored tobacco in Vermont did not make it across the finish line this year. However, S.18 passed the Senate at the end of March and will be considered in the House in 2024. There is major support to pass the legislation in the House. As we’ve reported, Governor Scott throughout the legislative session has reported that he is not against the concept of the bill. The Joint Fiscal Office has released numbers showing an anticipated impact of only a $4 million loss in revenue to the State, manufacturers, distributors, and retailers report that the implications are much higher. The Tax Department has reported that they have no ability to identify the tax revenue from flavored tobacco vs non-flavored, which causes a discrepancy.Manufacturers, distributors, and retailers across the state have reported losses that are much higher; closer to the $28 million to $35 million loss in tax revenue.
Dram Shops and Liquor Liability Beverage producers have recently reported the inability to remain insured in Vermont or have faced significantly higher insurance rates due to Vermont statute, which until now made no reference to negligence, which places significant liability on the establishment when it comes to serving an intoxicated person. Language in H.288, now Act 17 of 2023, will make it more palatable for insurance companies to provide coverage to these businesses by shifting from a strict liability law to a negligence standard for liability.
