Payment of Wages: West Virginia

Payment of Wages requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Author: Eric E. Kinder, Spilman Thomas & Battle, PLLC

Summary

This guide provides HR and payroll professionals with compliance guidance regarding West Virginia wage payment requirements, including those pertaining to the definition of wages, wage payment methods, pay frequency and lag time, pay deductions, pay statements, pay rate notices, final pay, noncompliance penalties, wage theft, deceased employee wages and unclaimed wages.

Definition of Wages

The West Virginia wage payment law defines wages as compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis of calculation. It includes commissions, fees, salaries, bonuses, pensions, vacation allowances, back pay, tips and retroactive wage increases. Wages also include any other kind of remuneration for, or compensation attributable to, services performed by an employee, such as accrued fringe benefits that can be calculated and that are payable directly to an employee.

Fringe benefits may be calculated according to an agreement between an employer and employee if the agreement does not contradict the wage payment law. Fringe benefits means any benefit provided to an employee or group of employees by an employer, or that is required by law, and includes:

  • Vacation (whether regular, graduated or floating);
  • Holidays;
  • Sick leave;
  • Personal leave;
  • Production incentive bonuses;
  • Sickness and accident benefits; and
  • Benefits relating to medical and pension coverage.

Wages due or earned includes all wages and accrued fringe benefits owed to an employee for all hours the employee is permitted, required or suffered to work, up to and including the 12th day immediately preceding the employer's regular payday.  Accrued fringe benefits are those benefits that are earned and payable directly to an employee based on the terms and conditions of a written company policy. The policy must explain the method(s) used to calculate the amount of fringe benefits earned and the conditions the employee must meet to become eligible for payment.

Bonuses that can be calculated and are based on production, incentives or other measurable goals are considered wages when such terms or conditions are stated in a written company policy. Bonuses granted by an employer that cannot be calculated are considered a gift rather than a wage.

W. Va. Code § 21-5-1(c); West Virginia Division of Labor, Wage Collection Fact Sheets (5 - Wages Defined; 8 - Employee Fringe Benefits); TSD 381.

Wage Payment Methods

The West Virginia wage payment law permits employers to pay employees by cash, check, direct deposit and payroll debit card. An employer must comply with the distinct requirements of each method.

Cash or Check

West Virginia law requires employers to pay employees in cash, check or money order that can be deposited or cashed at a bank convenient to the place of employment. W. Va. Code § 21-5-4(a); W. Va. Code St. R. § 42-5-8.2.

Penalties. If an employer refuses to redeem checks or money orders for a period of five days, the court will award the employees the unpaid amounts, plus interest until the amounts are paid. If the employer is insolvent, the employees do not lose their right to collect from the employer. W. Va. Code § 21-5-6.

Direct Deposit

Employers in West Virginia are permitted to offer wage payment by direct deposit.

Written employee consent is not required before paying wages by direct deposit. However, an employee must be free to choose the depositary institution and a written disclosure must identify the employee, the financial institution, the type of account and the account number.

Also, if an employee does not provide the employer with information necessary to enable direct deposit (e.g., banking information), the employer may pay the employee by payroll debit card.

W. Va. Code § 21-5-3(b)(4), W. Va. Code § 21-5-4(a).

Payroll Debit Cards

West Virginia law allows the deposit or electronic transfer of funds into an employee's payroll card account.

Employers are not required to obtain employees' written consent before paying wages by payroll debit card, but the program offered must meet all the following requirements:

  • Provides employees with full written disclosure of any applicable fees;
  • Ensures employees have the ability to make at least one withdrawal or transfer from the payroll debit card per pay period without cost or fee for any amount up to the amount contained on the card;
  • Ensures employees have the ability to make in-network withdrawals or transfers from their cards without cost or fee; and
  • Gives employees the option of being paid by direct deposit instead; if an employee does not provide the information necessary to enable direct deposit (e.g., banking information), the employer may pay the employee by payroll debit card.

A payroll card (or paycard) is defined as a card, code or combination thereof, or other means of access to an employee's payroll card account, by which the employee may initiate electronic fund transfers or use a payroll card to make purchases or payments.

A payroll card account means an account in a federally insured depository institution that is directly or indirectly established through an employer and to which electronic fund transfers of the employee's wages, salary, commissions, or other compensation are made on a recurring basis, whether the account is operated or managed by the employer, a third party payroll processor, a depository institution or another person.

W. Va. Code § 21-5-3.

Pay Frequency and Lag Time

Employees (except railroad company employees) must be paid ay wages due at least twice a month, and no more than 19 days apart, unless provided otherwise by special agreement. W. Va. Code § 21-5-3.

Wages due does not include authorized deductions or authorized wage assignments. W. Va. Code § 21-5-3(a).

If an employee does not receive wages on the day specified as payday for any reason, the employee can demand payment of the wages any time after that day at the location where the employee is typically paid. W. Va. Code § 21-5-3(c).

Wage payments may be provided by mail so long as they are on time. W. Va. Code St. R. § 42-5-9.1.

Exceptions. Railroad employers must pay employees on the first day of each month for amounts earned between the 1st and 15th of the previous month. Payments for amounts earned between the 16th and the end of the month must be made on or before the 15th of the next month. Railroad employers are prohibited from making agreements to pay employees at a different frequency. W. Va. Code § 21-5-2.

All other employers may submit a written petition to the commissioner of labor to establish a regular schedule of paydays that occur less frequently than every two weeks. However, the employer must continue to comply with standard regulations while waiting for the determination. W. Va. Code St. R. § 42-5-10.4. There is no situation in which the commissioner will approve a pay frequency of less than monthly. W. Va. Code St. R. § 42-5-10.1.

Penalties. If an employer refuses to pay any of its employees at the required frequency, the court will award the employees the unpaid amounts, plus interest until the amounts are paid. If the employer is insolvent, the employees do not lose their right to collect from the employer. W. Va. Code § 21-5-6.

An employee is not entitled to liquidated damages for a violation of the pay frequency requirements. See Atchison v. Novartis Pharms. Corp., 2012 U.S. Dist. LEXIS 37697 (S.D. W. Va. Mar. 20, 2012).

Pay Deductions

West Virginia law lists the specific types of pay deductions that employers are permitted to make and are prohibited from making.

Permitted Deductions

Employers are permitted to make only the following types of deductions from employees' wages:

  • Amounts required by law to be withheld (e.g., income and employment taxes);
  • Union dues;
  • Club dues;
  • Pension plan payments;
  • Payroll savings plan payments;
  • Credit union loans;
  • Charitable contributions; and
  • Hospitalization and medical insurance premiums.

Employers and employees may agree to other types of deductions.

Deductions are also permitted under certain circumstances for an employee's unreturned employer-provided property on termination of employment.

Prohibited Deductions

An employer may not make pay deductions for the cost of medical exams required as a condition of employment.

Penalties. An employer that violates this provision is liable for a penalty of not more than one hundred dollars for each violation. 

W. Va. Code § 21-3-17(d), W. Va. Code § 21-5-1(g), W. Va. Code § 21-5-3, W. Va. Code § 21-5-12.

Pay Statements

Employers must give each employee a written, itemized statement of earnings and pay deductions on each payday. The statement must include the employees' hourly rate of pay or salary, the number of hours for which the employee is being paid, any overtime rate of pay, any bonus and incentive pay and itemized deductions.

W. Va. CSR § 42-5-7, W. Va. Code § 21-5-9.

Electronic Option

West Virginia employers may provide employees with electronic pay statements if the employees have direct, immediate and convenient electronic access to them and employees who do not have electronic means to access their pay statements are given the option to receive paper pay statements. W. Va. CSR § 42-5-7, W. Va. Code § 21-5-9.

Pay Rate Notices

When new employees are hired, they must be provided with written notice of their pay rate(s) and basis of pay, pay periods, the place or method of wage payment, the time and place of payment and any other terms of employment (e.g., fringe benefits). The notice requirement may be satisfied by posting a notice accessible to all employees.

Existing employees must be notified in writing one full pay period before the effective date of any changes in the required information. Changes in the information may also be communicated by posting a notice where all employees will see it on a daily basis.

Additionally, employers must post an abstract of the wage payment law in a place accessible to employees.

W. Va. Code § 21-5-9; W. Va. CSR § 42-5-4.

Final Pay

The final pay law in West Virginia does not distinguish between voluntary and involuntary terminations. The same requirements apply in both scenarios.

Unreturned employer-provided property. Except for employment relationships that are subject to a collective bargaining agreement, if at the time of an employee's resignation or discharge from employment the employee does not return employer-provided property, the employer may withhold, deduct or divert a portion of the employee's final wages to cover the replacement cost of the property that is not returned. Employer-provided property includes property provided by an employer for use in the employer's business, including equipment, phones, computers, supplies or uniforms. Replacement cost is the actual cost paid by an employer for the property, including any discounts the employer received.

An employer may make such deductions if the property:

  • Was provided to the employee in the course of, and for use in, the employer's business; and
  • Has a value of more than $100.

However, an employer is permitted to make a deduction only if the employee signs a written agreement when they receive the property (or sign or ratify an agreement if the property was provided prior to May 15, 2018 - the date the failure-to-return-property provisions took effect) that includes the following information:

  • A specific itemization of the property, including its replacement cost;
  • A clear statement that the property must be returned immediately upon discharge or resignation; and
  • A clear statement, along with the employee's acknowledgement and agreement, that if the employee fails to return the property the replacement cost will be deducted from the employee's final wages.

Further, before deducting the replacement cost, the employer must notify the employee of the replacement cost of the property in writing at the time of discharge or resignation by personal service, or as soon as practicable by personal service or certified mail with return receipt requested, and must make a demand for the return of the property by a certain date that is not more than 10 business days after the notice is provided.

If the employee objects in writing to the replacement cost to be deducted within the 10-day period, the employer must place the deducted funds into an interest-bearing escrow account. The employee then has three months in which to file a civil action or seek equitable relief. If the employee does not do so, the employee forfeits the amount in escrow and the amount returns to the employer. An employee may voluntarily agree in writing to an employer's deduction of a certain amount from final wages instead of returning the property.

If the employee returns the property in suitable condition, the employer must relinquish the deducted wages to the employee. Uniforms that were issued by the employer within three years of their return are deemed acceptable in their current condition. Replacement tools are the property of the employee and not subject to return or deductions. Replacement tools include equipment, other than uniforms, provided to the employee for use in the course of the employer's business to replace lost equipment.

W. Va. Code § 21-5-4(f).

Voluntary Termination

Employees who voluntarily quit or resign must be paid all wages earned before the termination of employment by the next regular payday, either in the usual manner of payment or by mail if the employee requests it. If an employee requests payment by mail, the payment will be considered to have been made on the postmark date of the mailed payment. W. Va. Code § 21-5-4.

Involuntary Termination

Employees who are involuntarily terminated, and employees who are suspended or laid off due to a labor dispute, must be paid all wages earned before the termination of employment by the next regular payday, either in the usual manner of payment or by mail if the employee requests it. If an employee requests payment by mail, the payment will be considered to have been made on the postmark date of the mailed payment. W. Va. Code § 21-5-4.

Accrued Time

Accrued, unused vacation time or other fringe benefits provided by an employer-employee agreement that are due, but by the agreement are to be paid at a future date or upon additional conditions that are ascertainable, must be paid on termination of employment according to the terms of the agreement. W. Va. Code § 21-5-4(b).

Noncompliance Penalties

An employer that fails to pay an employee's wages as or when required by law is liable for two times the unpaid amount as liquidated damages, in addition to the amount that was not paid when due. If an employer is determined by a court to be bankrupt, the failure to pay will be deemed to have stopped at the time the employer filed for bankruptcy. W. Va. Code § 21-5-4.

Additional penalties apply specifically to violations of requirements regarding wage payments by check or money order; pay frequency; certain prohibited deductions; and unclaimed wages.

Wage Theft

The state does not have a wage theft law. However, employers are subject to noncompliance penalties under the state wage payment law.

Deceased Employee Wages

If an employee dies, an employer may pay up to $800 of wages due the deceased employee. Payment may be made to the appropriate claimant upon proper demand if the employer does not have actual notice of the pendency of probate proceedings and without requiring letters testamentary or of administration. The payment may only be made to the following claimants in the following order of priority:

  1. Surviving spouse;
  2. If none, children aged 18 or older in equal shares;
  3. If none, father and mother, or the survivor of the two;
  4. If none, sisters and brothers, or the person who pays the funeral expenses.

Payments made as required release and discharge the employer as to the amount of the payment.

W. Va. Code § 21-5-8a.

Unclaimed Wages

Wages that remain unclaimed by an employee for one year are considered abandoned property.

Required Reports

If an employer is holding $50 or more in unclaimed wages as of the preceding June 30, it must file a report and remit the wages together to the state Unclaimed Property Division by November 1.

If the employer is holding less than $50, it may file an aggregate report. 

Reports are filed using Forms UP-A and UP-B. They may be filed electronically with prior UPD approval.

A record of unclaimed wages must be kept for 10 years after filing a report.

Penalties. An employer that fails to report or remit unclaimed wages on time is liable for 12% annual interest from the due date plus a civil penalty of $200 per day, up to a maximum of $5,000. If the failure is willful, or if a fraudulent report is filed, the employer is liable for a civil penalty of $1,000 per day, up to a maximum of $25,000, plus 25% of the wages not reported.

Notices to Employees

An employer holding unclaimed wages must send a written notice to the employee, if their address is known, 60 to 120 days before filing the report.

W. Va. Code § 36-8-2(a)(12), W. Va. Code § 36-8-7, W. Va. Code § 36-8-21(a), W. Va. Code § 36-8-24.

Future Developments

There are no future developments.