Wage increase could strain the economy

ELKINS – Legal experts have taken issue with a bill that passed in the recent legislative session and some fear that if it is signed into law, it could put a strain on economic growth in the Mountain State.

House Bill 4283, which is a bill written with the intention of raising the minimum wage to $8.75 by 2016, has its critics including Attorney Brian Peterson, of Martinsburg, who says that the bill could detract employers from setting up shop in the Mountain State.

Peterson said in a phone conference last week that in order to raise the minimum wage, legislators had to revise the definition of “employer” within the State Code. According to the legislation, an employer “includes the State of West Virginia, its agencies, departments and all its political subdivisions, any individual, partnership, association, public or private corporation, or any person or group of persons acting directly or indirectly in the interest of any employer in relation to an employee; and who employs during any calendar week six or more employees as herein defined in any one separate, distinct and permanent location or business establishment.”

However there is a section below that definition which is struck by the new bill that exempts employers “if eighty percent of the persons employed by him are subject to any federal act relating to minimum wage, maximum hours and overtime compensation.”

Peterson says that the new definition could be problematic when it comes to things like overtime pay when workers are on the clock in excess of 40 hours per week, because, previously, some employees fell under an exemption. One example that Peterson cited was employed firefighters, many of whom can work shifts of 24 hours at a time. In this instance, employers would be pressed to maintain a full-working staff and be able to resist paying excessive overtime, Peterson explained.

Another example Peterson mentioned was the 8/80 Rule for hospital and care facility workers, where overtime is calculated based on if an employee works over eight hours in a day and in excess of 80 hours in a two-week pay period. Peterson believes that this exemption would not be available if the legislation is signed as it currently reads.

“This could be an issue because if I’m an employer or a business owner looking to come to West Virginia, one thing I could be looking at is ‘are my employees going to be exempt?'” Peterson said. “I believe that it could put a financial burden on many businesses and it could make West Virginia less competitive.”

Peterson said that due to these measures, some employers may decide to hire more part-time workers to avoid paying excessive overtime for full-time employees.

But the bill has its supporters, including Del. Denise Campbell, D-Randolph, who says that the bill was written with the intent of helping struggling workers throughout the Mountain State.

“We have a lot of people living below the poverty level in our state,” Campbell said, in an interview last week. “I totally understand the business and employment concerns when it comes to raising the minimum wage. We want to support small businesses. The legislators voted to raise the minimum wage in an effort to boost the economy.”

Campbell also acknowledged that she believes that the legislature would be in favor of amending the bill to accommodate as many parties as possible. She also said she was in favor of increasing the minimum wage but not at the risk of causing a snowball effect on West Virginia’s economy.

“The intent is not to cause any business or organization any hardship,” Campbell explained. “We are always on the look out for anything that could potentially cause more difficulties than expected. If anyone has any concerns about anything that goes on with the legislature, I strongly encourage them to come to me with them. I’m always more than willing to look at them.”

The last time the legislation raised the minimum wage was in 2008 from $6.55 per hour to $7.25 per hour.

Contact Chad Clem by email at cclem@theintermountain.com.