Why did the Legislature require paid leave?

The Legislature found that paid sick leave would provide a healthier work environment for all Vermonters. However, about half of private-sector employees—60,000—lacked paid sick leave.

These Vermonters were generally employees of Vermont small businesses.

What employers does this law cover?

Almost all employers are covered. There are some exceptions listed below. Since mainly small businesses lacked leave programs, the law affects mostly small businesses.

New employers are exempt for the first year that the business hires any employees. 21 V.S.A. § 486(a).

When did the law go into effect?

January 1, 2017. There is a one-year grace period for employers with five or less employees. These very small employers have until January 1, 2018 to comply with the use of leave, but not the accrual.

What must an employer do?

Employers must accrue paid sick leave for all employees–at least one hour of sick leave for every 52 hours an employee actually works. The accrual must begin by January 1, 2017. See Footnote 1.

Okay, so there are 2080 hours per year when some works a 40-hour work week.

Yes, and 2080 ÷ 52 = 40 hours that a person would earn in an average year with no vacation. So the law anticipates some sick leave accrual for Vermonters working even more hours than a standard work-year.

When can an employee use the accrued sick leave?

For this year and 2018, an employee can use up to 24 hours of earned sick time a year. Starting in 2019, an employee can use up to 40 hours per year.

However, an employer may embargo the use of sick leave until January 1, 2018, or one year after the employee is first employed.

What can the sick leave be used for?

The sick leave can be used for the employee, or

• child, 
• spouse, 
• parent,
• grandparent, or
• step-parent of the employee.

The sick leave can also be used for sickness (see Footnote 2) or injury of help any of the above, and to:

• Obtain health care or long-term care
• Travel to an appointment related to the above
• Address the effects of domestic violence or stalking.

How much does an employer have to pay when sick leave is used?

The normal hourly wage rate, which better be at least the minimum wage. See Footnote 3. If less than a full workday, then the employee can be charged as sick leave only for whatever time is actually used.

What does the law say about unused, accrued paid sick leave?

Sick leave carries over from year to year. However, the limitations on use of leave (24 hours per year until 2018) still apply. Obviously, the employer can allow more use of leave than the minimums. See Footnote 4. Alternatively, an employer can pay the employee for unused sick time.

If the employer offers the full possible sick leave to employees at the beginning of the annual period (before the leave is actually earned), then the employer does not need to carry-over unused leave from the previous year. 21 V.S.A. § 484(a)(2).

What if the employee leaves? See Footnote 5. Must the employer pay for unused sick leave?

No … unless the employer had agreed to pay for unused sick leave.

Must an employee use sick leave when sick?

If the employer requires use of sick leave, then the employee must use sick leave. 21 V.S.A. § 483(f).

However, the employer and employee can agree on alternatives, if they both prefer.

They can agree that the employee:

• simply to make up the lost time, or
• trade hours so that another employee works during the sick time, and the employee with the sick time makes up the work for the other employee.

However, these options are simply options available by agreement.

Can the employer require the employee to find a replacement worker during sick leave absences?

No.

What happens if I fail to follow the paid leave law?

The Act makes an employer liable for damages. There is a criminal penalty for fraud.

If the failure is part of a larger claim—such as disability discrimination—it is certainly possible that the failure would be used as evidence of such discrimination.

Are there exceptions?

There are a several exceptions:

First, people who are exempt:

• Children (that is, people under age 18).
• Part-time and part-year employees in two situations:

1. Who work an average of less than 18 hours a week—averaged over a year.
2. Who work 20 weeks or less in a 12-month period if the job was never scheduled to last no longer.

• Executive officers, managers or members specifically approved by the Commissioner of Labor (21 V.S.A. § 601(14)(H)).
• Sole proprietors and partner-owner of an unincorporated business who qualifies a 7-part test, under 9 V.S.A. § 601(14)(F) (See the next question.)

What is the 7-part test for sole proprietors and partner-owners?

The exemption for sole proprietors and partner-owners applies only to those who meet a 7-part test. (This test generally reflects concerns regarding misclassification.)

Here is the seven-part test:

1. The work is distinct and separate from that of the person with whom the individual contracts.

2. The individual controls the means and manner of the work.

3. The individual acts as an independent business.

4. The individual works for the general public

5. The individual does not perform work exclusively for or with another person.

6. The individual is not an employee for purposes of income or employment taxation with regard to the work performed.

7. The individual’s services are:

• performed under a written agreement, and
• the agreement explicitly states that the individual is not considered to be an employee under this chapter, is working independently, has no employees, and has not contracted with other independent contractors, and
• the agreement includes information regarding the right of the individual to purchase workers’ compensation insurance coverage and the individual’s election not to purchase that coverage. See 9 V.S.A. § 601(14)(F).

Second, certain employers are exempt, often with qualification.:

• The Federal government (because of preemption under the U.S. Constitution).
• The State of Vermont (because there are statutory benefits and collective bargaining agreements). Temporary employees working for the State do get the benefits of the Act.
• Health-care facilities under 18 V.S.A. § 9432(8) or 33 V.S.A. § 7102(2) if the employee works on a per diem or intermittent basis.
• School districts, supervisory districts or supervisory unions meeting

Footnotes

1 There is an exemption for employees not covered by the Fair Labor Standards Act, 29 U.S.C. § 213(a)(1). Those exempt employees may be limited to accruing sick leave on the first 40 hours per week. 21 V.S.A. § 482(c)(2).

2 The sick leave can also be used to care for a family member if a business or school is closed for public health or safety reasons.

3 The minimum wage is set at 21 V.S.A. § 384. See 21 V.S.A. § 482(d).

4 9 V.S.A. § 483(d).

5 If the employee is then rehired, then he or she can use sick leave immediately, but does not retain sick leave accrued before the break, unless the employer agrees. 21 V.S.A. § 483(f).

Disclaimer

What is a gift certificate?

Vermont’s definition of a gift certificate is very broad, and includes both traditional paper gift certificates and the increasingly common plastic gift cards similar to credit cards.  The Vermont definition of a gift certificate is “a record evidencing a promise made for consideration by the seller or issuer of the record that money, goods, or services will be provided to the holder of the record for the value shown in the record.”

For example, a gift certificate includes:

• An electronic gift card
• A stored-value card
• A card issued by a retailer or group of retailers
• A paper gift certificate
• Any similar record or card

How long before a gift certificate can expire?

A gift certificate cannot expire until 5 years after the date of issuance or after the date the funds were last loaded onto the gift certificate, whichever is later. Also, upon expiration, the issuer, if requested, must return the unused portion of the paid value of the gift certificate to the holder.  See below for more on expiration dates. 

What if no expiration date is disclosed?

A gift certificate not clearly marked with an expiration date or for which the expiration date is not otherwise made available shall be deemed to have no expiration date.

How must the expiration date be disclosed?

In most instances, both the date of issuance and the expiration date must be clearly identified on the face of the gift certificate.

For an electronic card with a stored dollar value, the expiration date must either (1) be clearly printed upon a sales receipt transferred to the purchaser at the time the transaction is completed, or (2) made available to the purchaser or holder of the electronic card through means of an internet site or a toll free information telephone line.

Must a merchant return the unused portion of a gift certificate upon expiration?

Following the expiration date of the gift certificate, the unused portion of the paid value of the gift certificate shall be returned to the holder of the gift certificate, if requested.

Can a gift certificate be redeemed for cash?

If the remaining value of a gift certificate is less than $1.00 or the certificate has expired, the gift certificate shall be redeemable in cash for its remaining value if the holder requests it.

What fees may be charged?

Vermont law prohibits dormancy fees, latency fees, issuance fees, redemption fees, or any other administrative fees or service charges in connection with a gift certificate. 

However, a money transmitter licensed by the Department of Federal Regulation, a financial institution, or a credit union may charge a one-time fee upon the issuance of a stored-value card equal to the lesser of (a) 10 percent of the face amount purchased or added to the stored-value card; or (b) $10.00.

What is a loyalty, award, or promotional gift certificate?

The definition of a loyalty, award or promotional gift certificate is “a gift certificate that is issued on a prepaid basis primarily for personal, family, or household purposes to a consumer in connection with a loyalty, award, or promotional program and that is redeemable upon presentation to one or more merchants for goods or services or that is usable at automated teller machines.”

The following are examples of loyalty, award or promotional gift certificates:
Loyalty:  A customer who has spent over $500 in a given time period receives card for $50 to be used at any time.
Award: Employer gives gift card for $50 to be redeemed with a local merchant to employees with exceptional job performance.
Promotional:  New bakery charges $30 for gift cards worth $50.  (The paid value of the card is $30; the promotional value is $20.)
Loyalty and promotional:  A customer who has spent over $500 in a given time period receives a card for $50 to be used by January 1.

What are the rules for a loyalty, award or promotional gift certificate?

A loyalty, award, or promotional gift certificate shall clearly and legibly set forth the following disclosures, as applicable:

On the front of the gift certificate:

• Indication that the gift certificate is issued for loyalty, award, or promotional purposes; and
• The expiration date of the gift certificate, including the expiration dates for the paid value of the gift certificate, if any, and the promotional value of the gift certificate, if any.

On or with the gift certificate:

• The amount of any fees allowed by law that may be imposed in connection with the gift certificate and the conditions under which they may be imposed.  See Question 7 for fees that may be charged.

On the gift certificate (front or back):

• If any fee is assessed against the gift certificate, a toll-free telephone number and, if one is maintained, a website address that a consumer may use to obtain fee information.

Is a merchant required to respond to a balance inquiry?

Yes, the issuer of the gift certificate, at the holder’s request, shall inform the holder of the unused balance remaining on the gift certificate as well as the expiration date of the gift certificate.

What are the penalties for violating the Vermont gift certificate law?

A penalty of not more than $1,000.00 per violation may be imposed upon any person who violates any provision of  8 V.S.A. §§ 2701-2711, any applicable rule, or any order issued by the Commissioner of the Department of Financial Regulation, plus the state’s costs and expenses for the investigation and prosecution of the matter, including attorney’s fees.

The Commissioner may order any person to make restitution to any person as a result of a violation of this law.

Any gift certificate that contains any provision in violation of this chapter is contrary to public policy, and is void and unenforceable against the holder of the gift certificate.

May a consumer bring a private right of action under the Vermont gift certificate law?

Yes.

Are there exemptions to these rules?

Yes, the rules outlined above do not apply to any of the following:

• A loyalty, award, or promotional gift certificate issued pursuant to an awards or loyalty program where no money or other thing of value is given in exchange for the gift certificate, provided that the certificate complies with the requirements outlined at Question 9 above. For example, gift certificates given out by a store to persons walking through the store (but not necessarily buying anything) need not have a five year expiration date.
• The promotional value of a gift certificate issued in exchange for paid value, provided that the gift certificate complies with the requirements outlined at Questions 2, 3, 7 and 9 above.
• A gift certificate donated to a charitable organization and used for fundraising activities of a charitable organization, without any money or other thing of value being given in exchange for the gift certificate by the charitable organization, provided that the expiration date is clearly and legibly printed on the gift certificate.
• Prepaid calling cards issued solely to provide an access number and authorization code for prepaid calling services.
• A season pass, a discount ski card, or a gift certificate sold for admission to any seasonal recreational activity.
• A payroll card account issued pursuant to and in full compliance with 21 V.S.A. § 342(c).
• A card for services that is not tied to a specific cash value, i.e., a yoga or fitness punch card that can “only be redeemed for yoga services and not for some monetary value.” 
  See Hughes v. CorePower Yoga, LLC, Case No. 12-cv-00905 (D. Minn. 2013)
  Finding that a class pack of 10 yoga classes was not a “gift card” because the class pack was “unaffected by changes in price” and it “allow[s] the customer to participate in the yoga course regardless of the value of the class at the time the customer redeems his Class Pack.”  The court also noted that gift cards would not include monthly passes to a parking garage, admission passes to theme parks, physical training packages, music lessons, and bus passes good for a certain number of rides.

Disclaimer

Who has to follow this law?
The law applies only to for-profit entities that are “regularly and primarily engaged in trade or commerce” – these are called “commercial co-venturers.” The law does not apply to:

• Nonprofits or religious or fraternal organizations
• Professional charitable fundraisers
• Individuals who normally work in one industry but, on a limited basis unrelated to their normal activities, are undertaking a charitable sales promotion. 

Example: Rebecca is an energy consultant, but every fall she sells pies at the local famers’ market.  This year, she is raising money for building schools in Haiti.  She can say a portion of her profit from the pies will go to building schools, but she does not have to follow all of the disclosure and record-keeping requirements because this is not her regular and primary job.

Are there any promotions where I don’t need to give full disclosure or keep records?
A commercial co-venturer does not have to provide full disclosure and keep records if:

• One-hundred percent of the amount a consumer pays for the good or service goes to the charity.
• The co-venturer does not generate a net profit from the promotion.
  Allen’s Market is raising money for veterans.  It buys and prints t-shirts for Memorial Day.  After recouping the cost of the shirts and printing, Allen’s donates the remaining money to a veterans’ cause.
• The co-venturer does not advertise that any amount of the purchase price of a good or service will go to a charitable cause.  
  Newport Sporting Goods always donates to the annual Lake Swim, but does not advertise that the purchase of any particular product or service will increase or affect the amount of the donation.
• The promotion does not involve the sale or lease of goods or services.  
  “Mt. Ascutney Autobody supports Clean-up the Connecticut.”

If a promotion requires the disclosures, when do I need to provide them?
Anytime – and every time – a co-venturer makes a representation that it will donate to a charitable cause based on the sale of goods or services, it must follow the disclosure requirements of the law.  A “representation” includes any “advertisement, commercial or other communication to the public in any medium.”

Where do I need to put the required disclosures?
The disclosures need to be placed “in close proximity” to any promotional materials suggesting a charitable sales promotion.  This means, for example, on the same sign as the promotion itself, attached to the sales display-rack, included nearby on the same webpage, or listed in the same print or on-air advertisement.

What does the disclosure need to look like?
There is no requirement for the format of the disclosure, but the information must be “clear and conspicuous,” meaning a similarly sized type-face as the promotion, or a separate sign attached to the promotion.  In short, the disclosure must be presented in such a way that it will be readily noticed and understood by consumers.

What qualifies as a charitable organization or charitable purpose?
These terms are defined under Vermont’s charitable solicitations law, 9 V.S.A. § 2471.  A “charitable purpose” means “any benevolent, educational, philanthropic, humane, patriotic, social welfare, advocacy, public health, environmental conservation or civic objective or any objective of law enforcement officers, firefighters or other persons who protect the public safety.”  A “charitable organization” works to further any charitable purpose.

Disclaimer