Payment of Final Wages- A Costly Rule if Overlooked by PayrollOctober 23, 2014 – Articles
We recently had the privilege of presenting to the West Virginia Association of School Human Resource Officials (WVASHRO) on the topic of “Employee Discipline: Step-by-Step for the Personnel Office.” One of the topics of discussion was the termination of employees, which for county board of education personnel is covered in West Virginia Code 18A-2-8. Unfortunately, often times we find ourselves having to terminate an employee for misconduct or failure to improve performance. However, an issue we often overlook and many are unaware of relates to the payment of the terminated employee’s final wages. The applicable law is West Virginia Code 21-5-4. The law provides that a board of education/employer must pay a terminated employee’s wages no later than the next regular payday or within four business days. If payment is not made accordingly, the board of education/employer is liable to the employee for three times that unpaid amount as liquidated damages.
Over the past several years, there have been a large number of lawsuits filed by disgruntled terminated employees seeking to recover three times their final paycheck simply because the final wages were not issued in accordance with the required law. The West Virginia courts have ruled in favor of the disgruntled terminated employee and awarded treble damages along with attorney fees (note the language in the code below “shall”).
The statutory language is as follows:
Whenever a person, firm or corporation discharges an employee, such person, firm or corporation shall pay the employee's wages no later than the next regular payday or four business days, whichever comes first. Payment shall be made through the regular pay channels or, if requested by the employee, by mail. For purposes of this section, “business day” means a day on which state offices are open for regular business.
It is important to ensure timely payment of final wages to terminated employees following acceptance of termination by the board of education. The payment of final wages includes any fringe benefits that are capable of calculation at the time of separation of employment. Absent timely payment of final wages, the board of education could (“shall”) be subject to treble damages, plus attorney fees. We have seen many employees receive their final paycheck outside of the statutory window and recover three times the amount of the final paycheck, plus payment of attorney fees. Avoid the technicality which has a horrible result for employers.
Of course, if you have any questions regarding this or any other issue, always feel free to contact our Education Law Practice Group at Dinsmore & Shohl LLP.