Alert: West Virginia House Bill 4283 Raises Minimum Wage and Has Unintended Consequences

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West Virginia Governor Earl Ray Tomblin signed House Bill ("HB") 4283 into law yesterday, April 1, 2014. The bill will raise West Virginia's minimum wage incrementally, from $7.25 per hour to $8 per hour on January 1, 2015, and to $8.75 on January 1, 2016. This increase is applicable to all West Virginia employers and will directly impact more than 100,000 West Virginia residents currently working at the minimum-wage level.

 

But raising the minimum wage through HB 4283 comes with unintended consequences - as currently drafted the bill prevents West Virginia employers from relying on certain existing federal overtime exemptions under the Fair Labor Standards Act ("FLSA"). If this issue is not rectified, certain employees in West Virginia who may currently be classified as "exempt" under the FLSA will become subject to overtime and maximum hours provisions. Additionally, HB 4283 as enacted will alter some long-standing methods of paying employees. For instance, West Virginia employers will not be able to calculate overtime based on paying their employees a "day rate" - a change which will particularly impact employers in the energy sector. Additionally, HB 4283 will remove the ability to calculate overtime pursuant to a fluctuating work week. 

 

Simply put, the bill in its current form, beyond raising the minimum wage, directly impacts certain energy workers, seasonal employees, hospital employees and nursing home staff (among others), regardless of their hourly wage. 

 

To discuss and remedy these issues, Governor Tomblin has called for a special legislative session this May. Absent further legislative intervention, HB 4283 will create additional cost and legal compliance requirements for West Virginia employers (even beyond the increased cost associated with raising the minimum wage). 

 

Stay tuned for further information regarding the West Virginia Legislature's efforts to fix these critical flaws in HB 4283 during its special session in May 2014.  

 

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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