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The state of West Virginia has enacted legislation that will provide a “safe harbor” for employers to correct certain alleged wage and hour violations involving former employees. State Delegate Joshua Higginbotham introduced the legislation— House Bill (HB) 2646—which adds a provision to the state’s Wage Payment and Collection Act (WPCA) to give employers and employees the opportunity to resolve disputes over unpaid wages without resorting to legal action. The West Virginia House of Delegates passed the bill on March 4 with the state senate approving the measure the next day, and Governor Jim Justice signed it into law on March 25.
Prior to the adoption of HB 2646, employers would be liable for liquidated damages (a penalty double the underlying amount) and attorneys’ fees if they failed to pay a separated employee’s wages by the next regular payday, regardless of the reason. Thus, honest mistakes could translate into costly litigation.
Given that many wage and hour lawsuits come in the form of class action litigation, the liability for attorneys’ fees in particular could become overwhelmingly expensive, especially for small businesses unfamiliar with the WPCA’s requirements. Not surprisingly, unscrupulous attorneys more familiar with them were known to leverage that knowledge to obtain lucrative settlements from employers.
Under the safe harbor provision in HB 2646, a separated employee will have to provide written notice to the employer with a demand for any alleged underpayment or nonpayment of wages and/or benefits, and the employer will have seven calendar days after receiving the written notice before becoming liable for liquidated damages and attorney’s fees. Similarly, a separated employee would not be able to participate in class action litigation under the WPCA without first giving a written demand notice.
While the safe harbor provision obligates an individual seeking back wages or benefits to provide the demand notice, the law also requires employers to provide separating employees with a written notice of where and to whom to send such a demand by both email and postal mail. Should they fail to do so, the safe harbor provision created by HB 2646 does not apply.
Inasmuch as the goal of the WPCA is to make sure that employees receive their just compensation in a timely manner, HB 2646 facilitates a means for them to do so without running straight into court. It also gives employers an opportunity to resolve seemingly innocent mistakes without bearing the cost of a pricey settlement or potentially even pricier court costs. That sounds like a win-win scenario, which is the hallmark of good legislation.