Vermont PEO Laws: Registration, Bonding and Payroll Requirements
Vermont licenses employee leasing companies through the Department of Labor's Employee Leasing Program: $100 application plus $1,000 fee, annual renewal, $100,000 bond or letter of credit, $100,000 audited net worth. SUI wage base $15,400 (2026); 1.0% new employer rate; benefits charged to clients' experience. Minimum wage $14.42.
| PEO registration or licensing required | Yes — no person may engage in employee leasing without a license issued by the Vermont Department of Labor under Chapter 12 of Title 21 (employee leasing companies), administered through the Department's Employee Leasing Program with Form EL-1. source (opens in new window) |
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| Regulating agency | Vermont Department of Labor — Employee Leasing Program; 21 V.S.A. Chapter 12; Vermont Administrative Code 24-010-007. source (opens in new window) |
| Bond or security requirement | $100,000 surety bond or letter of credit for the benefit of the Commissioner (21 V.S.A. 1035(a); Vt. Admin. Code 24-010-007), increasing in later years to not less than 5% of the prior year's Vermont wages, benefits, workers' comp premiums, or unemployment contributions; waived for applicants accredited by an approved national entity; audited adjusted net worth of $100,000 also required. source (opens in new window) |
| Registration renewal cycle | Annual — $1,000 renewal fee, due at least 60 days before the expiration date of the license; initial application adds a one-time $100 fee. source (opens in new window) |
| SUI taxable wage base | $15,400 (2026) source (opens in new window) |
| New-employer SUI rate | 1.0% for most new employers effective July 1, 2026; foreign construction employers pay their industry's average rate. source (opens in new window) |
| State workers' comp fund | Not verified |
| State paid leave mandate | Paid sick leave is mandated (earned sick time, 21 V.S.A. 482: 1 hour per 52 hours worked, up to 40 hours per year); there is no mandatory paid family or medical leave — the Family and Medical Leave Insurance (FMLI) program is voluntary, and legislation creating a mandatory benefit (H.66) has not been enacted. source (opens in new window) |
| State minimum wage | $14.42 per hour (2026) source (opens in new window) |
| PEO SUI reporting basis | Unemployment benefits are charged to the client company's experience rating record and contributions are paid under the client's state employer account number at the client's rate (21 V.S.A. 1038); the Commissioner may require weekly payments; employee leasing companies must file quarterly unemployment reports plus an annual client list by December 31. source (opens in new window) |
Sources
- 21 V.S.A. 1032 — Commissioner of Labor administers employee leasing chapter — verified 2026-08-12
- VT Dept of Labor — Form EL-1 Employee Leasing Licensure & Registration — verified 2026-08-12
- Vt. Admin. Code 24-010-007 — license requirements; $100,000 bond or LC; audited net worth — verified 2026-08-12
- Harbor Compliance — Vermont PEO: $1,000 annual renewal, due 60 days before expiration — verified 2026-08-12
- VT Dept of Labor — 2026 UI taxable wage base $15,400 — verified 2026-08-12
- VT Dept of Labor — Unemployment tax rates (1.0% new employer rate from 7/1/2026) — verified 2026-08-12
- 21 V.S.A. 482 — Earned sick time (paid leave mandate) — verified 2026-08-12
- VT Dept of Labor — Minimum wage $14.42 effective 1/1/2026 — verified 2026-08-12
- 21 V.S.A. 1038 — Benefits charged to client; contributions under client account number — verified 2026-08-12
- 21 V.S.A. 1038 — Registration and UI requirements — verified 2026-08-12
- Vt. Admin. Code 24-010-007 — Employee leasing licensure details — verified 2026-08-12
What we know about Vermont
Vermont regulates the PEO industry through its employee leasing statutes, Title 21, Chapter 12 of the Vermont Statutes Annotated, and treats PEO-style arrangements as "employee leasing" regardless of the label used. Under 21 V.S.A. section 1032 the Commissioner of Labor administers the chapter and adopts rules in consultation with the Commissioner of Financial Regulation, and the Department's Employee Leasing Program administers the licensing process using Form EL-1. The licensing regime is set out in section 1033 and fleshed out by the Vermont Administrative Code rule 24-010-007: an applicant files an application on a department-approved form with a one-time, non-refundable $100 application fee and a $1,000 license fee, lists its controlling persons with affidavits on moral character and management competence, proves maintenance of a Vermont business location, and certifies that it does not also operate a temporary help business with the same entity. Financial responsibility is the cornerstone of the regulation. Under section 1035(a), a licensee must maintain an audited financial statement prepared under GAAP showing an adjusted net worth of at least $100,000 or five percent of the prior year's Vermont wages, benefits, workers' compensation premiums or awards, or unemployment compensation contributions, whichever is greater, prepared within six months by a Vermont-licensed independent CPA. In addition, the applicant must acquire and maintain an initial surety bond or letter of credit for the benefit of the Commissioner of $100,000, and for each subsequent year it must maintain security equal to not less than five percent of the prior year's Vermont wages, benefits, workers' compensation premiums or awards, or unemployment compensation contributions but never less than $100,000. The Commissioner may waive the security requirement for PEOs accredited by an approved national accrediting entity, and a licensee may not pass the cost of the bond on to client companies. Licenses renew annually, with a $1,000 renewal fee due at least 60 days before the license's expiration date. Vermont's unemployment insurance rules are client-centric: benefits are charged against the client company's experience rating record under 21 V.S.A. section 1038, and quarterly unemployment reports and contributions are filed and paid under the client's state employer account number at the client's rate, with the Commissioner empowered to require weekly contribution payments. The employee leasing company must also file each leasing agreement within ten days of execution, maintain payroll records for every client, and submit an annual client list by December 31. For 2026 the Vermont Department of Labor set the taxable wage base at $15,400 and the new employer contribution rate at 1.0 percent for most employers, effective July 1, 2026, with foreign construction employers assigned their industry's average rate. Vermont's minimum wage is $14.42 for 2026 under 21 V.S.A. section 384. The state mandates paid sick time through the earned sick time law in 21 V.S.A. section 482, accruing one hour per 52 hours worked up to 40 hours per year, but paid family and medical leave remains voluntary through the FMLI program administered by The Hartford, and H.66, which would create a mandatory benefit, has not been enacted into law.
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