One of the dangerous aspects of lawmaking is unintended consequences.  Legislators pass a law only to learn later that the language makes a change that was not contemplated.

That’s what we have with HB 4283, the bill passed by the West Virginia Legislature this year raising then state’s minimum wage.  The intent was to increase the base pay for entry level workers by $1.50 over the next two years, meaning the minimum wage would rise to $8.75 by 2016.

Supporters argued the increase is overdue; the state’s minimum wage has been at $7.25 an hour since 2008.  Lawmakers did not say so publicly, but privately they acknowledged that the raise would be good election year politics.

However, legislators apparently made a mistake… a big one. Brian Peterson, an employment attorney for the law firm Bowles Rice, has researched the bill and determined that, as written, it will dramatically change overtime rules.

Currently, nearly all West Virginia employers are covered by the federal Fair Labor Standards Act.  That law includes many employee classifications that are exempt from overtime rules–computer professionals, commissioned sales people, seasonal and recreational employees, railroad employees, drivers and mechanics—over 50 in all. The federal law also includes narrow exemptions for firefighters, police officers, hospital and residential care employees.

Peterson says the bill providing for the increase in minimum wage is written in a way that eliminates those exemptions, dramatically increasing the number of employees in the state who would have to be paid time-and-a-half after 40 hours.

It’s not just private businesses that would be impacted.  Peterson believes municipalities would suddenly face significantly higher costs for fire and police protection, costs that would have to be passed on to taxpayers.

Word is getting out, and Governor Tomblin is hearing from government and business leaders, such as Wheeling Area Chamber of Commerce President Terry Sterling, who are worried about the bill.

“The unintended result is that all West Virginia employers with six or more employees would be required to comply with state overtime requirements that otherwise have not been updated since 1982,” Sterling wrote in a letter to Tomblin.  “Making the situation even worse, the overtime law changes made by House Bill 4283 would take effect June 6, 2014, leaving employers just a matter of weeks to scramble to comply with the provisions.”

West Virginia regional jail officials say they would have to calculate overtime differently for correctional officers, adding an estimated $3 million to payroll costs.

It’s evident that the bill, if it becomes law as written, would be a disaster.

The intent of lawmakers was to raise the minimum wage, not fundamentally change how overtime is calculated by thousands of West Virginia employers.  The Governor should veto the bill.

Lawmakers have to report back to Charleston before the June 30th end of the fiscal year to clear up some budget issues.  They can fix the minimum wage bill then.

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Comments

  • Stacey

    It doesn't seem fishy that the ONE lawyer saying this is paid by the Chamber? Anyone think that is a bit fishy at all or do you just blindly follow what corporate hacks tell you regularly?

    I call BS on this and all he's saying. Sign the bill, wait to see if this happens, and then apologize when the world doesn't come to an end.

    • Aaron

      Read the bill Stacey.

    • Tom

      Obviously not a business owner in WV. It is easy to roll the dice with another person's money/business. Signing the bill just to see what happens is just flat our irresponsible behavior....but this is the state of politics now-a-days...

  • bulldog95

    Is anyone really shocked that something like this happened? I am not. If they wanted to raise the min. wage then how is a bill needed to do this that is more than 2 pages.

    Simply refer to some old law where the established wage is set and then say it is hearby increased to this on this date and this on this date. Simple and DONE. This is like the Ukraine bill that other garbage in dealing with the IMF.

  • Daryl

    Sure we wouldn't want to pay a few more workers overtime wages when they deserve that extra pay ! It would bring our whole capitalist system crashing down .

    • Butch

      The horror of paying people overtime! Capitalism would be ruined....FOREVER.

      • ole sasquatch

        The very opposite of capitalism is giving people artificial pay. Capitalism is not capitalism anytime govt. intervenes. I would have thought being Americans you all would have known that. You need to get out of that democratic socialist way of thinking or you make everyone poorer and stagnant - like what is happening now.

        • Butch

          As an American, I've realized that the 20+ times they've raised the minimum wage hasn't hurt us.

          As an American, I've realized that China doesn't have a minimum wage and I don't want to be like China.

          As an American, I KNOW I want those WORKING paid enough to buy a loaf of bread and a gallon of gas.

          • Jason412

            I clearly said the food increases have been since the beginning of 2014.

            "According to the Bureau of Labor Statistics, the price of food in February rose 0.4% from January, the largest increase in nearly three years. The report suggests that prices may rise as much as 3.5% during 2014."

            Do you think income growth will see above 3.5% this year? If not, that's how goods are outpacing wages.

          • The bookman

            According to the Bureau of Labor Statistics, the CPI for 2013 increased 1.1% for all of 2013. That's 1.1 cents on the dollar all of 2013.

            Income growth in 2013 was more than double the CPI at 2.6%. WV had the lowest growth at 1.5%, still above the CPI for the year. So, how, exactly is the cost of goods outpacing wages?

          • Jason412

            "Are you aware that pricing for the gallon of milk and loaf of bread you want everyone to be able to purchase are directly tied to the cost of production, of which labor cost is a key component?"

            Just said this a minute ago in the other article, but bread and milk have already went up 10-30% since the beginning of the year. Labor cost didn't raise a single percent, but prices have.

            "Do you know the economic impact of those 20+ raises and how many jobs they have cost unskilled employees?"

            Do you know the answer to that?

            Do you really think the first 11 of those increases, from 1938 to 1968, cost significant amounts of unskilled employees their jobs?

          • Big Bob-E

            Gee Scott...seems to me that the price of Big Mac's have gone up without a raise in the minimum wage. ..and they will continue to go up regardless. Sounds like the same old tired "theory of trickle down economics."

          • Aaron

            Do you know the economic impact of those 20+ raises and how many jobs they have cost unskilled employees? How many opportunities of on the job training have been eliminated because small businesses cannot afford the added cost? Do you truly know the cost or is your knowledge anecdotal?

            Regarding China, are you aware that they are a communist country that not only owns the production but the labor as well and very few have little choice in where they work, much less how much they make?

            Are you aware that pricing for the gallon of milk and loaf of bread you want everyone to be able to purchase are directly tied to the cost of production, of which labor cost is a key component?

            With all your knowledge, you should have no problem explaining what you would do if you owned a bakery and incurred a 20% increase in labor that reduces your profit from 1% to -1%, right.

          • Scott

            Of course with minimum wage increasing, so will the price of a loaf of bread. And Big Macs. And any product or service that requires the use of minimum wage employees. Minimum wage increases are instant inflation and that affects everyone.

  • Pensfan

    Just another example (can anyone say "obamacare" ?)of law makers voting for bills, they don't fully understand or have not taken the time to read thru...

  • wornoutwv

    You are mistaken Hoppy in the idea that this was misintended. No doubt some legislators didn't bother to read what they were voting law but this wasn't misintended.

  • hillbilly

    most of the legislators are attorneys?
    make sure you dont use them on a case they don't under stand law!

    • Rich

      In fact, most legislators are not attorneys.

  • JJ

    Thanks to Obama, Earl Ray, and the gang, I'm now $1.50 an hour closer to the poverty line.

    Why can't people grasp that increasing the minimum wage impacts the middle class as much, if not more, than those earning minimum wage? Willful ignorance under the guise of concern.

    • Jason412

      Forgive my willful ignorance, but how are you now closer to the poverty line? The FPL is not directly based on the minimum wage. If it was, someone working a full-time minimum wage job would be at the poverty line, not below it.

      • The bookman

        Jason, the FPL is calculated from year to year based on the CPI, or Consumer Price Index. If you apply the principles of economics, that an increased cost of labor will eventually increase the price of goods or services when applied evenly across all providers, it becomes readily apparent that the FPL will rise. I think the point of the above comment is that in a job making more than the minimum wage, the FPL will approach his/her earnings, as the FPL increases while wages above the minimum wage remain stagnant. It is certainly oversimplified to assume an even trade of $1.50, but the point is valid.

        • Jason412

          Goods are already going up drastically. FPL will be going up right along with those increases, regardless of if the minimum wage is increased or not.

          • The bookman

            That was the point of his post, that the FPL would encroach his wage from the bottom up. His opinion is that increasing the minimum exacerbates that phenomenon, and I believe economic theory supports his opinion.

    • bulldog95

      I feel for those that are in jobs that make 10 dollars an hour because when their hours get cut and business raises their prices, you do get closer to the poverty line.

    • Wowbagger

      +1

  • Being facetious

    So our lawmakers can't read or write, but our teachers think they deserve a raise? Makes sense to me, too.

  • Wowbagger

    I actually think that some of the exempt classes (particularly low level "professionals") should be subject to overtime as some are routinely abused under the current system, however I suspect that this is actually an election year poison pill to get a veto from the governor. Then legislators can take credit for supporting a minimum wage bill without actually raising the minimum wage.

    Nothing these Bozos do is truly accidental!

  • Medman

    Less than 5% of our legislators actually read and understand most bills. Couple that with the lack of competent staffers who are supposed to review these bills for legal compliance are the major reasons for messes like this. I have wondered for years why they do not get competent legal advice on technical issues related to labor law, healthcare, contracts, etc.

    • Rich

      Where'd you get that statistic?

  • Shinnston Guy

    Hahahahahahahahahahahahaha! Funny how we chastize those few legislators that study bills and take the time to find any flaws. In our need for instant gratification we label them "boring" and "nerds." Yet we fail to realize that the task of governing is supposed to be BORING, which is why the Founding Fathers couldn't wait to leave Washington each year and get back to their real jobs. Today's actors that pose as "elected representatives" don't read, examine, or question. They just want to win their office time and time again. To that, I repeat, "Hahahahahahahahaha!"

    • Medman

      shinn, Well it is good to know that you feel this is humorous, meanwhile the public has to pay for fiascos like this. My best advice for you is, grow up.

  • Aaron

    I'm of a mind that our legislatures knew pretty much exactly what they were signing, at least on the committee level and their intent was to eliminate of these exemptions. I recall when this bill was being discussed that there was discussion of some slaary positions exempt under federal law that some delegates felts should be paid OT.

    An example is convenience store managers. Many work 60+ hours a week at wages that are often less than the clerks who work for them. Years ago, I turned down such a position for that very reason.

    Legislatures may come out and say the municipality pay raise was unintended but somehow I do not believe that is the case. I am of a mind that somebody, somewhere knew exactly what they were doing when they authored the bill in the manner they did.

  • Woodchuck0

    Let the law stand. Earl Ray needs to sign it.

    Everyone needs to know how much the legislature does not know what laws they are passing in the middle of the night.

    Besides, people need overtime. I get overtime, and everyone else should.

    Oh yea, that is not popular for reelection politics. Just give the people crumbs and you get votes.

  • CaptainQ

    Hoppy, this development really doesn't surprise me. Often our 'brilliant' lawmakers in Charleston pass bills without thoroughly reading or understanding them. Take the infamous 'Dog Tax' they passed back in the late 1980's, for example. It was a bill intended to add an extra tax to all of the 'puppy mills' in the state, but as the law was written, the 'extra tax' fell on anyone who owned three or more dogs. To their credit, after realizing their mistake, they fixed it during a Special Session later that year.

    Whether this new Minimum Wage law is a 'mistake' or not depends on who you ask. Sadly, a very sizable percentage of workers in WV are at minimum wage and only receive a 'raise' when that minimum wage rises. They probably don't think this law's a mistake. The many hard working citizens of this state who don't earn OT pay after clocking in over forty hours a week may not see this law as a mistake either. Those businesses/companies/sole proprietors who will end up paying MORE out in wages definitely DO see this law as wrong. No surprise here. Of course, there's also the business argument that basically says wages NEED to be kept low so WV can compete with the rest of America for new businesses. How's that been working so far, folks?

    Well, time will tell whether a future Special Session will 'tweak' this law. For better or worse? Who knows?

  • Did I miss something

    I thought only a very small percentage of West Virginia's workforce fell under the jurisdiction of West Virginia State labor laws that pertained to wages.

    Several years ago I called the State Labor board to complain about not being paid overtime and I was told because the company I worked for had an average gross income of 1200 dollars a day and/or shipped or received products across state lines that I fell under Federal jurisdiction.

    In short, I guess it kind of falls under the commerce clause. Maybe.