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Vermont governor signs minimum wage increase law

Vermont Gov. Peter Shumlin.
AP
Vermont Gov. Peter Shumlin.

Vermont Gov. Peter Shumlin signed a bill raising his state's minimum wage incrementally over the next four years, with an ultimate goal of $10.50 per hour by 2018, higher than any other U.S. state.

The Green Mountain State already boasted one of the highest state minimum hourly wages at $8.73, and now a bipartisan effort in the state legislature has cemented even higher levels above the federally mandated $7.25 per hour, the Burlington Free Press reports.

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"These are foolish numbers," restaurant co-owner Randy George told the Free Press. "To grow as a business, you can't do that by exploiting your own people." He challenged his business colleagues across the state to pay above the minimum wage.

Since 2007, Vermont has had a minimum wage annual increase plan based on a consumer price index, according to the Free Press, and this will resume again in 2018 after the $10.50 target is hit.

Read MoreSeattle approves highest US minimum wage

Opponents of the law, including the Vermont chapter of the National Federation of Independent Business, argued that the faster wage increases will "put a strain on small businesses and impede economic growth," the Free Press reported.

The passage of this bill may not signal the end of employee compensation battles in Vermont. Committees in the state House discussed forcing employers to offer seven days of paid leave, but the proposal died before reaching the Senate. The Free Press quoted Vermont's House general chairwoman predicting that "paid sick leave is very much alive."

Read More In liberal cities, minimum wage puts businesses in a bind

—By CNBC

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