Now that remote work is accessible and popular, more companies are hiring out-of-state employees. Employers get the benefit of choosing from a larger talent pool, while employees are free to work from another state—and everyone loves the convenience and flexibility. However, hiring out of state employees in Vermont can create complex legal issues.
Complying with Vermont’s employment laws is crucial: failing to meet your state tax, insurance and other obligations could expose your company to liability. Because each state’s employment laws can vary so dramatically, this can be a time-consuming and expensive task.
SixFifty has developed a solution. Our multistate employer tools are designed to simplify the out-of-state hiring process, cutting down the time and cost it takes to onboard new hires.
Here’s what the out-of-state hiring process in Vermont could look like.
Scenario 1: Employee works from home in another state
Before remote work became popular, most people had to find new jobs when they moved out of state. Today, employers are free to retain their best employees, no matter where they’re located. However, it’s important to remember that the new state’s employment laws will govern that worker—even if you’re headquartered elsewhere. That is, you might be a New York employer, but any employees living and working in Vermont are subject to Vermont’s laws.
Scenario 2: Hiring out-of-state employees in Vermont
On the other hand, you might wish to hire a brand-new employee in Vermont. Again, employers must remember that wherever the employee lives and works, that state’s employment laws and protections will apply. Employers must ensure that all of their policies and procedures comply with Vermont law, lest they expose the company to liability. This can quickly become complicated when you’re hiring in more than one state at a time.
Multistate Employer Registration Factors to Consider
As an employer, it’s your duty to research and comply with all of Vermont’s state laws. This includes establishing an economic nexus within the state, fulfilling your tax obligations, familiarizing yourself with employment policies and more. Failure to do so could result in fines and penalties, but it’s also time-consuming and complex.
SixFifty has identified five key areas of focus when hiring out-of-state employees in Vermont. Here’s what the process might look like.
1. Vermont Employment Registration
First, you’ll need to establish an economic nexus within the new state. This includes registering to do business in Vermont, reporting your new hire to the state Department of Labor within 10 days, and registering for unemployment insurance and obtaining workers’ compensation coverage.
- Obtain a registered agent
- Register to do business in Vermont
- Report new hire to the Department of Labor
- Register for unemployment insurance
- Report unemployment insurance account to payroll provider
- Obtain workers’ compensation coverage or update the policy
2. Vermont Tax Registration
Next, you’ll need to fulfill your tax obligations. Even though your company may be headquartered elsewhere, you still need to register for an income tax withholding account, fill out and file the income tax withholding form for your employee, and register for a Vermont sales tax license.
- Register for income tax withholding account
- Obtain the completed state income tax withholding form from the employee
- Register for a sales tax license or permit
3. Vermont Employment Policies
Vermont has 11 state-specific employment policies which must be included in your employee handbook. Three of these policies only apply to companies with a certain employee number threshold. Employers should review their handbook and either update or add the new policies as necessary.
- Review employee handbook for compliance
- Update policies or add new leave policies as needed
4. Vermont Required Employment Policies (April 2023)
- Crime Victim Leave
- Elected Official Leave (6 Employees)
- FMLA (10 Employees)
- Jury Duty Leave
- Meal and Rest Breaks
- Military Service Leave
- Paid Sick Leave
- Pregnancy Leave (10 Employees) (Parental Leave)
- School Activity Leave
- Sexual Harassment Policy
- Town Meeting Leave (Voting and Election Official Leave)
- Witness Duty Leave
5. Vermont Employment Implications
Next, you’ll need to ensure your employment implications are compatible with Vermont law. This includes paying at least the state minimum wage ($12.55 per hour) and complying with overtime and payroll policies. Your non-compete provisions and COVID-19 laws must comply with Vermont law, and you’ll need to consider insurance coverage.
- Ensure non-compete provisions comply with Vermont law
- Confirm the employee is paid at least the minimum wage
- Review the applicable overtime laws
- Confirm the payroll practices meet the payment frequency standards in Vermont
- Consider whether insurance extends coverage to employees in Vermont
- Consider COVID-19 laws that affect the employee
6. Vermont Signage
Finally, Vermont requires employers to post or distribute 12 different types of signage. The state has not indicated how to do this for exclusively remote employees, but generally, posting the signs on the company website, in company communication channels or in an easily accessible web folder will satisfy this requirement.
- Post or distribute required signage
Simplify Multistate Compliance with SixFifty
The process of maintaining compliance can be complex and extremely nuanced for companies unfamiliar with Vermont employment laws and standards. It’s why SixFifty has compiled an extremely useful tool for businesses hiring out-of-state employees in Vermont. To simplify the process of hiring out-of-state employees in Vermont or supporting remote employees on-the-move, check out our 50 State Hiring Kit.