On March 13, 2020, Governor Phil Scott declared a State of Emergency. A few days later, roughly 3,000 Vermont state employees went home. It was the right call. A novel virus was spreading fast, nobody knew how deadly it would be, and sending office workers home was a reasonable public health response.

What happened over the next six years is a different story — one that ends with Vermont taxpayers holding a bill nobody has bothered to calculate, and a labor ruling that created a legal right out of an emergency accommodation that was never supposed to be permanent.

The Emergency and the Order

The State of Emergency that sent state workers home was not a bargained agreement. It was an executive order. Governor Scott extended it repeatedly — thirteen times between March 2020 and June 2021 — before formally ending it on June 15, 2021, after Vermont became the first state in the nation to vaccinate 80% of its eligible population.

The emergency was over. The remote work was not.

Through a series of administrative memos from the Agency of Administration — issued unilaterally, without collective bargaining, without a complaint from the Vermont State Employees’ Association — remote work was extended, then extended again, then quietly allowed to calcify into standard practice. A March 2021 memo from Secretary of Administration Susanne Young extended telework to May 31, 2021, and noted that the administration was “considering what changes could be made to our pre-pandemic remote work policies.” No changes were made. People stayed home.

For four more years.

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What Was Actually Agreed To

Before COVID, Vermont state employee telework was governed by Policy Number 11.9, issued by the Department of Human Resources on February 3, 2012. That policy — the only negotiated telework framework Vermont state employees ever had — contains two sentences that bear reading carefully.

First: “Telework is a voluntary program, provided at the sole discretion of the Appointing Authority, and may be terminated by the employee or employer at any time, with or without cause.”

Second: “Wages, benefits and job responsibilities will not change as a result of performing telework.”

That second sentence is worth sitting with. The state of Vermont, in a negotiated policy, agreed that wages would not change based on work location. At the time it was written, that was protective language — a guarantee that an employee granted telework wouldn’t see their pay cut as a condition of that accommodation. Reasonable enough in 2012, when telework was a rare privilege extended to perhaps a few dozen employees statewide.

What that sentence did not account for — and what nobody on the state’s negotiating team apparently considered — is what labor economists have recognized since Adam Smith first described it in 1776: wages are not simply payment for skill and output. They bundle in compensation for every burden a job requires. Rigid hours. Required physical presence. Commute costs. Work clothing. Childcare structured around a fixed schedule. The inconvenience of being somewhere specific at a specific time, every workday, whether you feel like it or not.

Economists call this a compensating differential. It is, in plain language, the pain-in-the-ass fee. It is priced into every salary for every in-office job in the country. And in 2012, the state of Vermont agreed in writing that it would never adjust wages to account for it — in either direction.

The Raises

Prior to COVID, contract negotiations between the state and VSEA were, by the historical record, contentious and thin. The 2016-2017 contract dispute was so acrimonious it ended up before the Vermont Labor Relations Board, with the state offering 1% in year one and 1.25% in year two. The union wanted 2% and 2.25%. That fight — over less than one percentage point — went to binding arbitration.

Then COVID hit, the emergency order sent people home, and the raises got substantially larger.

The 2020-2022 contract: 3% in year one, 3% in year two, plus step increases averaging 1.9% annually. The 2022-2024 contract: 3% and 2%, plus steps. The 2024-2026 contract: 4.5% in year one, 3.5% in year two — the largest single-year across-the-board increase in at least a decade.

Four contract cycles. Substantially higher raises than the pre-COVID baseline. Zero discussion on the public record, in any contract negotiation, of whether the elimination of commute burden, childcare costs, work wardrobe, and the requirement to physically appear at a specific location should factor into the calculation.

The 2012 policy said wages wouldn’t change as a result of telework. They changed. They went up. The work location variable that was supposed to be wage-neutral turned out not to be — just not in the direction taxpayers might have hoped.

The Math Nobody Did

Research on the compensable value of in-office attendance is extensive and consistent. A 2025 National Bureau of Economic Research study — using actual job offer decisions rather than hypothetical surveys — found that workers will accept an average pay reduction of 7% to work remotely rather than in-person. That figure represents what labor economists call the compensating differential for physical attendance: the premium an employer must pay to get someone to show up at a specific place at a specific time every workday. Separate survey-based research puts that figure higher, ranging up to 10% or more for government workers specifically. When the burden of physical attendance disappeared in March 2020, that premium did not.

The conservative figure — 7% of compensation — applied to 3,000 remote state workers earning an average of roughly $57,500 annually produces approximately $12 million per year in compensation paid for a burden those workers were no longer bearing. Over five years, that figure approaches $60 million. At the higher end of the research range, the cumulative figure climbs toward $90 million.

These are estimates. The actual number would require a full salary analysis by position. But the methodology is standard, the research is peer-reviewed, and nobody in Vermont state government, in the legislature, or in the press has applied it to this situation.

The Ruling and the Ratchet

In April 2026, the Vermont Labor Relations Board issued a 60-page ruling finding that the Scott administration had “refused to bargain in good faith” by implementing a return-to-office mandate without first negotiating with VSEA. The board concluded that telework is a mandatory subject of bargaining under Vermont’s State Employees Labor Relations Act, and that changing it unilaterally is a per-se violation.

The ruling is legally significant. It is also applied in one direction only.

When the Scott administration sent 3,000 employees home in March 2020 — unilaterally, by emergency order, without bargaining — the VLRB was silent. When the same administration extended remote work repeatedly through 2021 by administrative memo, without bargaining, the VLRB was silent. When four subsequent contract cycles were negotiated without either party placing the value of remote work on the table as a compensable variable, the VLRB was silent.

The legal principle the board applied in April 2026 — that telework is a mandatory subject of bargaining that cannot be changed unilaterally — was equally applicable in March 2020. It was not applied then. It was applied only when the change ran in a direction employees did not prefer.

The Scott administration’s position throughout the litigation was straightforward: the emergency order created the remote work arrangement, the emergency ended in June 2021, and what remained was governed by the 2012 telework policy, which explicitly reserved management’s right to terminate telework at any time without cause. The VLRB rejected that argument, finding instead that five years of practice had established a new status quo with stronger protections than the original negotiated document ever contained.

An emergency accommodation, extended by administrative memo, had become a legal right. No vote. No negotiation. No explicit agreement. Time and silence were sufficient.

The Taxpayer Question

Vermont taxpayers fund state employee compensation. They fund the buildings those employees work in — buildings that, according to the state’s own Space Books, grew by nearly 140,000 square feet between 2020 and 2025 while thousands of employees were home, and now sit at 8.8% vacancy. They funded $2.3 million in new lease costs the Scott administration incurred trying to bring people back to those buildings. They will fund the reimbursements the VLRB has ordered for employees’ commuting and other costs.

And for the six years prior to all of that, they funded compensation packages that, by the standards of labor economics and the state’s own research, included payment for a burden a substantial portion of the workforce was no longer bearing.

The 2012 telework policy said wages would not change as a result of telework. Whoever negotiated that language on behalf of Vermont taxpayers may not have known about compensating differentials. They may not have anticipated a pandemic. They almost certainly did not run the math on what wage neutrality would cost if three thousand people went home for six years.

The Vermont Supreme Court will now decide whether the VLRB’s ruling stands. Whatever it decides, it will not answer the question the ruling never asked: whether the legal principle it established should have applied from the beginning, in both directions, on behalf of the people whose money has been paying for all of it.

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Dave Soulia | FYIVT

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