New Vermont Legislation for Employers

by Downs Rachlin Martin PLLC
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In its 2017 and 2018 sessions, the Vermont legislature actively passed a number of bills that will impact the way Vermont employers do business.

While some significant measures were vetoed by the Governor, including those calling for a $15 minimum wage and paid family leave, a number of other measures were enacted into law and will go into effect in the coming months.

What Are The New Laws?

Updating Your Sexual Harassment Policies

In response to the “Me Too” movement, both chambers of the Vermont legislature unanimously passed H. 707, which goes into effect on July 1, 2018. The law begins by stating that “[a]ll employers, employment agencies, and labor organizations have an obligation to ensure a workplace free of sexual harassment.” This broad statement now makes clear that sexual harassment protections are not merely limited to a business’s employees. Rather, employers are obligated to protect all individuals in the “workplace,” including volunteers, interns, and independent contractors.

The law includes several new requirements for employers:

  1. Employers must provide written sexual harassment policies to new hires, and provide updated policies to all employees should a change be made.
  2. Employers are encouraged (but not required) to conduct sexual harassment trainings for new employees within a year of their start date and for all employees generally. Employers are also encouraged to conduct additional training for new managerial and supervisory employees within a year of their start date.
  3. Employers cannot require employees, as a condition of employment, to sign an agreement that restricts his or her ability to oppose, disclose, report, or participate in a sexual harassment investigation.
  4. If an employer enters into a settlement agreement regarding a sexual harassment claim, the following conditions must apply:
    1. The agreement cannot restrict the employee’s ability to work for the employer in the future.
    2. The agreement cannot restrict the employee from lodging a complaint with or participating in an investigation conducted by appropriate state or federal agencies, or complying with discovery requests or testifying in a litigation or an arbitration proceeding.
    3. The agreement cannot waive rights or claims that may arise after the date of the agreement.

As H. 707 made its way through the legislative process, legislators considered a prohibition on the use of non-disclosure agreements in settling sexual harassment claims. The final bill included no such prohibition, meaning sexual harassment settlement agreements may still contain confidentiality provisions. Employers should note, though, that the law may eventually enlarge their obligations. The law currently mandates several reports and recommendations from the Vermont Attorney General’s Office and the Office of Legislative Council designed to potentially expand protections in the future. These reports will review, among other issues, the extent to which confidentiality agreements should be enforceable.

The new law also tasks the Attorney General’s Office with creating an online portal through which individuals may more easily file complaints of sexual harassment. Additionally, the law provides the Attorney General’s Office with additional powers to inspect places of employment, question managerial employees, and examine employer records relating to sexual harassment with 48 hours’ notice. Following an investigation, the Attorney General’s Office may require the employer to conduct sexual harassment training or a working-climate survey.

Recreational Marijuana

Starting on July 1, 2018, Vermont residents over the age of 21 will be able to legally possess up to one ounce of marijuana or five grams of hashish. Vermonters may also cultivate no more than two mature marijuana plants or four immature marijuana plants. Retail sales will remain illegal. Additionally, the law still prohibits marijuana use in public places and allows landlords to ban the possession or use of marijuana in lease agreements.

Regarding Vermont employers, the new law affirms that it does not:

  • require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale, or growing of marijuana in the workplace;
  • prevent an employer from adopting a policy that prohibits the use of marijuana in the workplace;
  • create a cause of action against an employer that discharges an employee for violating a policy that restricts or prohibits the use of marijuana by employees; or
  • prevent an employer from prohibiting or otherwise regulating the use, consumption, possession, transfer, display, transportation, sale, or growing of marijuana on the employer’s premises.

In other words, Vermont employers may continue to prohibit marijuana use and possession in the workplace, as well as terminate or refuse to hire individuals who use marijuana. Vermont employers may consider revisiting their drug and alcohol policies, including by reminding employees that marijuana remains illegal under federal law.

Furthermore, the new statute on marijuana use does not impact Vermont’s drug testing laws. Employers may still test for cannabis, provided that they continue to follow the drug testing procedures and restrictions set out by Vermont law. As a reminder, these restrictions prohibit the use of random drug tests and require that job applicants be tested only after receiving a conditional offer of employment.

Asking About Prior Pay

As of July 1, 2018, Vermont employers will no longer be permitted to inquire about or seek information regarding an applicant’s current or past compensation.  Employers may not ask the applicant about his or her prior pay, and may not check with the applicant’s references about prior pay.  If an employer’s standard application form currently asks about prior pay, this form will need to be changed on or by July 1.

Importantly, the law specifically permits that employers may still ask applicants about their salary expectations.  During the application process, applicants may also voluntarily choose to disclose information about their prior pay.  If an applicant voluntarily discloses this information, employers may then check references to confirm the accuracy of the information provided.

Protecting Crime Victims

Effective July 1, 2018, Vermont’s Fair Employment Practices Act (“FEPA”) will be amended to extend its anti-discrimination and anti-retaliation protections to crime victims.  A “crime victim” is defined as any individual who has sustained physical, emotional, or financial injury as a direct result of the commission or attempted commission of a crime, as well as any individual who has secured an order of protection against an abuser or stalker.  The apparent need for these protections arose from stories of crime victims either working with or seeking employment at the same place of business as the crime’s perpetrator.  To avoid any perceived discomfort, some businesses allegedly acted to deny employment to the crime victim.  As of July 1, it will be unlawful to deny employment to an individual because of their crime victim status.

The law also extends new leave rights to employees who have continuously worked for six months or more, averaging at least 20 hours per week.  These eligible employees must be provided unpaid leave when necessary to attend a deposition or court proceeding related to a criminal proceeding or a hearing to secure an order of protection.  Employees exercising this leave right are entitled to protections similar to those provided under the Family Medical Leave Act (“FMLA”) or Vermont Parental and Family Leave Act (“VPFLA”).  Employees may choose to use accrued paid leave during their absence, insurance benefits must be continued for the duration of the leave, and, at the conclusion of the leave period, employees must be reinstated to the same or a comparable job.  The Vermont Department of Labor is tasked with publishing a new mandatory workplace poster.

Gender-Free Restrooms

A new law on gender-free restrooms applies to any public building or place of public accommodation, such as restaurants, hotels, doctors’ offices, retail stores, private schools, and day care centers.  Starting July 1, 2018, any single-user restroom in a public building or place of public accommodation must be made available for use by persons of any gender.  If the restroom is identified by a sign, the sign must not be gender-specific.

What Was Vetoed?

The following measures were vetoed by Governor Scott on May 22.  While there will be no further action on these measures in 2018, employers  should anticipate efforts to pass the same or similar measures in 2019.

$15 Minimum Wage

Both chambers of the Vermont legislature passed S.40, a bill that would gradually raise the minimum wage to $15 in 2024. In 2019, the minimum wage would increase to $11.10 per hour, rising incrementally to $15 in 2024. After that date, the minimum wage would rise by a measure designed to combat inflation.

Paid Family Leave

H.196 passed out of both chambers and would have established a Family Leave Insurance Program (“FLIP”) within the Vermont Department of Labor.  Similar to unemployment insurance, the program would have been funded by a payroll tax.  Eligible employees would have been entitled to twelve weeks of parental leave and six weeks to care for a family member, paid at 70% of the employee’s wage rate.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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