Legislative History
2005-2006: Minimum Wage Increased from $7.00 to $7.25
& COLA, Extension of Basic Needs Budget
2005
Victories
S.80 Minimum Wage Increase Passes, In the final hours of the 2005 Vermont Legislative session, the House and Senate reached a compromise on S. 80 to increase the minimum wage from $7.00 to $7.25 on Jan. 1, 2006 and then increase the rate by a cost-of-living-adjustment (COLA) based on the CPI-U index every January 1st starting in 2007. This bill makes Vermont the first state in the country to legislate an annual cost of living adjustment to our state minimum wage. The three states with COLAs on their state minimum wage rates changes their laws based on ballot initiatives (WA, OR, and FL). This increase will make Vermont the fourth highest minimum wage in 2006 based on the status of other minimum wage legislation in other states so far this year.
Sadly, Governor Jim Douglas decided to sign the bill into law behind closed doors on June 28th, 2005. Increasing the wages of over 10,000 Vermonters deserves more public education and acknowledgement than the Governor afforded Vermont's working people with his private handling of this important bill!
Winners & Losers: Although any increase to the lowest wage rate in Vermont is a victory to low wage workers who make the general minimum wage rate, this session had several disappointments for workers especially tipped employees. In the Senate version of S. 80, there was a COLA attached to the general minimum wage rate and the tipped employee minimum wage rate. In the House, the tipped employee COLA was removed by an amendment by Rep. Marron (R-Stowe) on behalf of the Restaurant Association. The final compromise of the bill did not contain a COLA for the tipped employee rate and thus the base rate will remain at $3.65/hour. There was some confusion by legislators on whether a COLA is needed for tipped employees because every worker is guaranteed to earn the general minimum wage rate even if they do not bring in enough tips for the week (the employer pays for the gap). However, several states do not differentiate between tipped and non-tipped workers in order not to have a two-tiered system. One key issue is that the employer of a tipped worker relies on tips to pay half of their workers' salary. In the spirit of bringing all jobs up to a livable wage level we should not have a two-tier system and insure that every employer is subject to the same minimum wage rates. The VLWC will bring this issue back next session to make sure tipped employees are treated and paid fairly.
In Vermont, as in several other states, we have two minimum wage rates--one for non-tipped employees and one for tipped employees. Currently, the tipped employee is defined as someone who makes more than $30 a month in tips. A tipped employee is guaranteed to make at least the general minimum wage for all of his/her hours worked in a week after adding all the tips and a base wage of $3.65/hour paid by the employer. If the worker does not make the the general minimum wage amount equivalent to the number of hours he/she worked then the employer must pay the difference (more than $3.65/hour until the employee is brought up to at least $7.00/hour in 2005).
The final minimum wage bill was also a weak compromise for workers who have not seen an increase to the minimum wage for several years during the 1980s and 1990s. If the Vermont minimum wage had been increased since 1969 based on a cost-of-living-adjustment (CPI-U) it would be $8.00/hour. Moreover, the current livable wage for a single person with no children is $12.37/hour. The Legislature did not make significant steps to account for the ground loss by years of no increase to the minimum wage, let alone addressing the significant wage gap between the minimum wage and livable wage.
H. 72, Unlawful Employment Practices Bill Passes, passed both bodies last week on Equal Pay Day (April 19th). The bill is currently in front of the Governor who is expected to sign it into law. H. 72 will make it unlawful for employers to retaliate against their workers for discussing wages. It also makes it illegal for employers to include a clause in the personnel manual dictating that workers cannot discuss wages and then force workers to sign the document. This bill is a great victory for low-wage workers who will have further protection to discuss wages and then possibly start a union. Also, women and people of color will have additional protection when trying to discover differences in salaries and compensation rates for equal work with male, white co-workers.
H. 403, Livable Wage/Basic Needs Study Passes
This bill was introduced to instruct the Vermont Joint Fiscal Office (JFO) to calculate the livable wage figures on an annual basis within the Basic Needs Budget Study. As introduced, the bill also instructed the JFO and Legislative Joint Fiscal Committee to review the methodology for the Study every two years. The livable wage figures are a vital resource for setting wages and for expanding the discussion on poverty by providing an alternative economic indicator (livable wage vs. federal poverty line). Many Vermont workers, non-profit organizations, governmental agencies, and businesses use the Study and livable wage figures for such purposes. During the last week of the session the Senate amended the bill to produce the study every other year with a supplement report during the interterm year to reflect major changes in the cost of living in Vermont. The House concurred with the changes in the last days of the session. The livable wage figures will now be produced on a 2 year basis. The next study is schedule to be produced in January of 2007.See the 2005-06 voting record, click here.
Read talking points on minimum wages, click here.
2006
Other Work
Tipped Minimum Wage:
Our priority was to eliminate the tipped worker minimum wage so Vermont would have one minimum wage rate like seven other states (AK, CA, MN, MT, NV, OR, and WA). Another option we explored was redefining tipped workers who are defined as any worker who earns “$30 or more in tips per month” to “$200 or more.” This would reclassify workers who receive a minimal amount of tips per month into the higher paid minimum wage category. A last option we considered was increasing the tipped worker base minimum wage to catch up to the rate of increase to the general minimum wage in the past five years and then attaching a COLA to the base rate as was passed in 2005 for the general minimum wage rate. For reference, between 2000 and 2007 the general minimum wage increased from $5.27 to $7.44 (assuming 2.6% inflation rate for increase from 2006 to 2007) ($1.69 increase) vs. the tipped minimum wage increased from $3.16 to $3.65 (49 cent increase).
At the beginning of the session, Sen. Richard Sears from Bennington County introduced S. 245 A Bill to Increase the Tipped Minimum Wage. On Feb 2nd, the Senate Economic Development Committee heard testimony from several tipped workers and supporters. It appeared that the Committee was receptive to supporting some level of increase to the current minimum wage rate of $3.65/hour. Unfortunately, S. 245 “died” in committee because a vote was never called before Town Meeting Day (i.e. crossover deadline). There was little momentum in the Senate Committee (Illuzzi, MacDonald, Dunne, Miller, Mullin, or Gander) to usher this bill through the committee process in order to get it to the floor of the Senate for a full vote. Sen. Sears attempted to amended another bill at the end of the session, but it was ruled non-germane to the bill.
Low-Wage Employers Subsidizes via Public Assistance for Employees:
Many workers qualify and utilize Vermont’s various public assistance programs due to low wages. A section of a bill under consideration in 2006 would have mandated that the State track the names of employers with 25 or more employees, whose workers utilize public assistance programs (numbers of recipients and expense to state) and the cost. The bill only mentioned health care programs such as VHAP and Dr. Dynosaur. We suggested an amendment to include ALL public assistance programs (heating assistance, food stamps, Section 8 housing, etc) in order to get a full picture of the total subsidy to low-wage employers.
In 2004, MA enacted a requirement in the 2005 budget to compile a list of employers (50 or more employees) with workers or dependents participating in public healthcare programs. CA is currently considering a similar bill AB 89 “Healthcare Disclosure Act”. Also regionally other municipalities (Suffolk County in New York and New York City) have mandated that employers with workers or dependents on public healthcare programs pay for the total cost being needed to pay for these recipients’ benefits.
This bill was not voted out of committee.
VLWC worked in coalition with the Vermont Natural Resources Council and Vermont Workers’ Center on a bill as part of our “Higher Standards for Big Box Campaign.” The bill (S. 175) required a community impact study for large-scale retailers (75,000 sq. feet or more) in order to better assess and respond to the potential impact of large retailers in Vermont communities. In mid-March, many environmental groups and anti-sprawl organizations testified in support of the bill. VLWC also testified along with High-Road Vermont on the economic importance of the bill in terms of better understanding the impact of low-wage large retailers on existing wages and benefits within a community.
The bill also included a small aspect of another bill VLWC was trying to advance—a bill to create an impact study on the total cost of public assistance programs used by employees who are employed at low-wage employers in Vermont. The bill would mandate a state study to be competed in Jan 2007 to show the impact of large retailers on state public assistance programs such as VHAP, food stamps, etc. Much has been written about the millions of dollars in in-direct subsidizes that Wal-Mart has received in many states by having their workers qualify and use state funded health and food security programs. This study would give us a small glimpse into the cost in Vermont. The Senate approved S. 175, “Community Impact Studies for Large-Scale Retail Operations Bill” by a vote of 20 to 5. The bill moved to the House but then did not move out of committee (House Natural Resources).
Paid Sick Days:
Support Vermont Commission on Women with Mandatory Sick Day Legislation
VLWC supported the Vermont Commission on Women’s work to pass a bill to require all employers to provide each employee who works 30 or more hours a week five paid sick days. If a worker worked fewer than 30 hours per week, sick days would be pro-rated. The bill was drafted during the 2006 session and was co-sponsored by Rep. Helen Head and Rep. Sarah Edwards. The bill did not move out of committee.Fairer budget and tax priorities:
The Vermont Fairness Alliance is a broad coalition of human service, religious, civic, labor, business, low-income, political, environmental, and other groups which has been organized to promote fairer budget and tax priorities for Vermont in 2006. Specifically, the Vermont Fairness Alliance calls for raising taxes--but only on the top 5% of Vermonters earning over $115,000/yr--to raise revenue to help balance the budget, while maintaining or even increasing funding for essential public services such as health care, housing, education and child care, public safety, and environmental protection. Rep. Bob Kiss proposed H. 428 which proposed to raise state revenue through a similar tax option to the one the Alliance proposes. VLWC supported the Vermont Fairness Alliance. The bill did not move out of committee.
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Vermont Livable Wage Campaign
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