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Bill

H 9

An act relating to the Vermont State and Judiciary Employees’ Cost-Savings Incentive Program

2025-2026 Regular Session Introduced by Conor Casey

The bill reinstates a program paying 25% of first-year savings (up to $25,000) to state employees in the Executive and Judicial branches whose cost-saving suggestions are implement

Read first time and referred to the Committee on Government Operations and Military Affairs
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Bill Summary · H 9

Overview

H.9 (2025-2026 Vermont Session) creates the Vermont State and Judiciary Employees’ Cost-Savings Incentive Program. The bill reinstates a monetary incentive for Executive Branch and Judicial Branch employees whose suggested changes are adopted by state or judiciary units and generate financial savings.

Main purpose and intent

  • Reestablish an incentive program to reward state employees whose cost-saving suggestions are adopted and produce measurable financial savings for the State of Vermont.
  • Extend the program to cover both Executive Branch agencies and the Judiciary.

Key provisions and changes

  • Definition of terms:
    • State employee: any classified, nonmanagement employee in the Executive or Judicial Branch.
    • Suggestion: an employee proposal submitted to the employee’s branch that may reduce expenditures.
  • Establishment of the program:
    • The program applies to any Executive agency/department/board/bureau/commission or other administrative unit, and to the Judiciary.
  • Eligibility and submission:
    • Eligible employees or groups submit suggestions on a form created by the Department of Human Resources.
    • An employee must satisfy all state tax obligations before receiving an award.
  • Evaluation criteria (within 60 days of submission):
    • Feasibility and desirability.
    • Not already under active study or continual review.
    • Not beyond reasonable job performance as defined by job specs.
    • Implementation would not degrade service quality.
  • Award eligibility:
    • An employee is entitled to an award only if all criteria are met and the suggestion is implemented.
  • Award details:
    • Award equals 25% of the savings realized in the first year of implementation.
    • Maximum award cap: $25,000 per suggestion (regardless of total savings).
    • If multiple employees submit the same suggestion, the award is divided equally among them.
    • Award is treated as wages for tax purposes.
    • Calculation basis: actual 12-month savings starting from full implementation.
    • Funding: paid from the implementing agency’s funds.
    • Timing: payment within 1 year and 30 days after full implementation.
    • Retirement: award does not count toward the employee’s average final compensation for retirement purposes.
  • Continuity and termination scenarios:
    • If an eligible employee terminates before full implementation, they still receive the full award.
  • Rejection and review process:
    • If a suggestion is rejected, the employee may request a review by a panel.
    • Review panel composition differs for Executive vs. Judiciary submissions.
    • Panel recommendations go to the State Auditor or Court Administrator; their decision is final.
    • Panels have specified member composition and timelines (meet within 30 days, decision within 15 days after meeting).
  • Appeals on award calculations:
    • Employees may challenge the awarded amount in writing within 30 days; the State Auditor or Court Administrator may adjust the award, finalizing the decision.
  • Contingent awards:
    • If a suggestion is initially rejected for criteria reasons but implemented within three years, the employee still receives the award as if implemented.
  • Reporting:
    • State Auditor and Court Administrator must annually report, starting Jan 1, 2027, on:
    • Implemented suggestions and realized savings.
    • Rejected suggestions and rationales.
    • Reports to Governor, General Assembly, and the Vermont State Employees’ Association.
  • Oversight:
    • The Joint Fiscal Committee will review the annual reports with the Vermont State Employees’ Association at least once per fiscal year.
  • Effective date:
    • July 1, 2025.

Who would be affected

  • State employees in the Executive and Judicial Branches eligible to submit cost-saving suggestions.
  • Agencies, departments, boards, bureaus, commissions, and other administrative units within the State and the Judiciary that receive and implement suggestions.
  • Oversight bodies: State Auditor, Court Administrator, Joint Fiscal Committee, and Vermont State Employees’ Association (in advisory/review capacity).

Procedural and timeline aspects

  • Submission to evaluation: within 60 days of receipt.
  • Implementation and savings measurement: 12-month savings period beginning at full implementation.
  • Award payout: within 1 year and 30 days after full implementation.
  • Review timelines: review panel processes occur within defined 30-day/15-day windows.
  • Annual reporting: starting in 2027, with ongoing fiscal-year reports.
  • Effective date: July 1, 2025.

Potential impacts and considerations

  • Encourages employee-driven cost containment across state government and judiciary.
  • Provides a substantial but capped incentive (25% of first-year savings, max $25,000).
  • Creates formalized review and audit processes to ensure criteria are met and that savings are real.
  • Requires coordination between human resources, finance, and the judiciary for evaluation, implementation, and reporting.
  • Possible implications for budgeting and payroll, given awards are classified as wages for tax purposes and paid from the implementing unit’s funds.

Compiled from official sources — confirm details with the bill’s official record.

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