Multiple labor bills were hurried through the Senate Economic Development Committee to meet the crossover deadline. One committee member acknowledged that the bills, “make changes that are significant” while another questioned why the Vermont Chamber was raising “last minute” questions, despite it being the first opportunity that the Vermont Chamber had to testify on the bill. When the bills are picked up in the House, the Vermont Chamber will continue to testify on the consequences S. 102 and S. 103 would have for the business community.  

S.102 contains broad language on what meetings an employer can mandate employees attend. Similar legislation in other states has prompted lawsuits over interference with rights established by the National Labor Rations Act. Additionally, language that would grant employees the right to refuse attendance at meetings they consider political, could have negative repercussions. For example, if DEI or ESG trainings are considered by someone to be political, as written, employers would not be able to require them to participate. S.103 would remove the standard of severe or pervasive for unlawful harassment or discrimination. The Vermont Chamber testified that as written, the legislation would bypass the opportunity for restorative change and instead be lost to litigation.  

The House is moving forward with H.66 and is expected to vote it out by the end of next week. Despite it taking two months to pass the legislation, few substantive changes were made from the time the bill was introduced to the time it was voted out of the House. The plan goes far beyond what was passed, and ultimately vetoed, in 2019. Funded by a 0.55% payroll tax, the plan would require $117 million annually to administer, $112 million in one-time startup funds, and as many as 65 new state employees during a severe workforce shortage. In the Senate, legislators have offered their own solution as part of their childcare bill, which would be twelve weeks of paid parental leave following the birth or adoption of a child.  

Further work will be required in the Senate to ensure legislators understand the current economic realities facing Vermont business owners, and the potential unintended consequences of an additional payroll tax on top of the considerable cost involved when an employee is on leave for 12 weeks. As the issue evolves, the Vermont Chamber will continue to center facts and data in testimony to ensure legislators understand the full impact the legislation would have on the Vermont business community. 

Following deliberations by a committee of conference, the Budget Adjustment Act was passed by the legislature and included funding for several economic growth initiatives advocated for by the Vermont Chamber, including middle-income housing development, employment resources for New Americans, broadband buildout, and rural infrastructure. 

The Budget Adjustment Act included: 

• $550,000 – State Refugee Office to implement Employment Assistance Grants 
• $3 million – Rural infrastructure investments  
• $5 million – Vermont Housing Incentive Program 
• $9 million – Missing Middle-Income Homeownership Development Pilot Program 
• $30 million – Vermont Community Broadband Board for state match to an NTIA federal grant that the Vermont Chamber  
• $95 million – Vermont Community Broadband Board to expand internet access 

Several labor bills were on the table this week in the Senate Economic Development, Housing, and General Affairs Committee, including legislation that would no longer designate Vermont as an “at-will” state by creating and lengthy and rigorous standard of termination of employment and requiring severance payments. This would make Vermont only one of two states that require a good cause termination process.  

Additional provisions in the bill would allow employees to skip an informational meeting during work hours that involves political or union discussions. Additionally, the committee discussed a bill that would increase the minimum wage to $15 an hour by 2025. The Department of Labor testified about worries that this can lead to an increase in wage compression within an employer. The bill also includes a study on tipped wages. 

Based on a fiscal note from the Joint Fiscal Office, the Paid Family and Medical Leave (PFML) program would be funded by a 0.55% payroll tax. The initial startup cost for the program would require $40.2 million of one-time funding. The annual price tag to administer the program would be $13 million and it would require 45-50 new employees to manage. Along with the extreme cost, it is no secret Vermont is facing a severe workforce shortage and given the state’s difficult history of standing up insurance programs, just the logistics of creating the program would be an uphill battle. The PFML program would provide 12 weeks of leave at 90% wage replacement and no waiting period, going beyond what was passed by the legislature in 2019. The Vermont Chamber continues to testify on the current economic realities facing Vermont business owners, and the potential unintended consequences of a payroll tax on top of the considerable cost involved in the loss of an employee for 12 weeks.