The West Virginia Legislature has brought West Virginia more in line with its neighbors in regulating how employers must pay former employees upon the employee’s departure. Historically, West Virginia has imposed different standards for providing an employee his or her final pay depending on whether the employee quit, quit with notice, was laid off, or was terminated. In addition to the differing standards, many times the law required payment much more quickly than required in neighboring states. The Legislature has simplified the standards somewhat beginning as of June 11, 2015. Governor Tomblin signed the bill March 31, 2015.
Under the revised law, employees – regardless of whether the employee quit or was terminated – need to be paid by the payday on which they would have been paid regularly for the work performed.
The change eliminates the need for West Virginia employers to accelerate payrolls or issue special payroll checks to handle employees who are terminated or who quit with notice. For instance, an employee who quits, or is fired on July 10th need only be paid wages earned by the day on which employees are paid for work performed on July 10th. Employers now simply need to process their payroll as they normally would do so. Final wages can be paid by regular procedures or by mail if the employee requests.
As a result, it would make sense for employers to require employees who are not regularly paid by mail or direct deposit to execute a brief acknowledgment that the employee will accept his or her final pay by mail. The Act has established that payment by mail is considered to have been made on the day the check is postmarked.
The Act retains one grey area. Employees who are the subject of a lay-off, which are involuntary separations not based on the conduct of the employee, must be paid by the “next regular payday,” but without the clarification that it be the day on which they regularly would have been paid. Consequently, employers should still take care to schedule lay-offs in a manner that would allow them as many days as possible to issue final checks.
In addition, the Legislature clarified that fringe benefits provided as part of an agreement with the employee and due to be paid on a future date or subject to additional conditions are to be paid according to the agreement and not the Wage Payment and Collection Act. This change will resolve the issue of how to pay certain bonuses or commissions, but will not relieve employers from having to calculate vacation time or PTO owed to the employee at the time of separation.
The penalty for a late payment, or miscalculation of fringe benefits owed, has been reduced by the amendments to the Wage Payment and Collection Act. Formerly, liquidated damages available under the Act were triple the amount paid late. The Legislature has revised that down to double.
Finally, pursuant to a separate bill, the obligation to pay employees at least every two weeks, unless the employer received special permission to do otherwise from the Division of Labor (“DOL”), has been revised so that employers now may pay twice a month without seeking special permission. Employers that wish to pay on a monthly basis, however, must still get permission from the DOL.
If you have any questions about this Act, or any labor and employment questions, please contact our Labor & Employment Practice Group