West Virginia Record

Saturday, December 14, 2019

Judge rules state didn't shortchange employees in payroll system switch

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By Chris Dickerson | Dec 4, 2019

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CHARLESTON – A senior status judge has ruled that state employees were not shortchanged when the state switched from twice monthly to biweekly pay.

Senior Status Judge Thomas C. Evans III granted summary judgement to the defendants Dec. 4 at the end of a hearing in Kanawha Circuit Court. The decision affected up to 40,000 public employees in every facet of state government. Many state agencies eventually were named as defendants.

“I don’t accept the plaintiffs’ argument here,” Evans told attorneys at the hearing, which took place in the ceremonial courtroom in the Kanawha County Courthouse. “I know it’s hard to understand why something is not due them (the employees). But, they’ve already been paid.”


Evans

The case focused on the state auditor’s office alleged failure to properly calculate and pay the wages of up to 40,000 public employees. The alleged incidents started before current Auditor J.B. McCuskey took office. The case involved both salaried and hourly public employees who claimed they were not fully paid in the 2017 calendar year because of the state’s switch from twice monthly pay to biweekly.

“We respect the court’s ruling, but we disagree with the decision,” Teresa Toriseva, one of the attorneys representing the plaintiffs, told The West Virginia Record after the hearing. “We believe this is a misinterpretation of the law.”

Toriseva said the plaintiffs likely will file an appeal with the state Supreme Court, take the matter to federal court or do both.

The claims against the auditor’s office sought recovery for all employees who claimed they were underpaid, and the claims were made under the West Virginia Wage Payment and Collection Act, which applies to state government the same as it applies to private industry. Additionally, West Virginia law does not allow state employees to be paid in arrears beyond one pay period, which is the only arrears authorized by the state.

The plaintiffs also claim that because of the switch from twice monthly to biweekly pay, they actually are being paid more than one pay period in arrears for some of their work.

Several attorneys representing state agencies attended the hearing, but only Bryan Cokeley – representing the state Supreme Court – spoke on behalf of the defendants.

“The judge and his staff clearly worked very hard to gain an understanding of a complex issue,” said Cokeley, a Charleston attorney with Steptoe & Johnson. “They showed a lot of insight into the law and the facts of this case.”

Evans was recalled to handle the case because all of the judges in Kanawha Circuit Court have a conflict on interest in the case.

According to court documents, the changeover in the pay system took place in three waves. The third wave was the only one with the issue, the plaintiffs allege.

The Wave 3 arrearage “was widely known, understood and admitted to in writing by state employees working on the problem,” the notice stated. “For example, court employees were advised they would receive the arrearage (about 1.6 percent of each employee’s wages) at the end of calendar year 2017. That did not occur. The arrearage was never paid (or made up).”

In short, the affected employees said they received their regular salary in 2016, but received about 1.6 percent less in 2017 because of the changeover. And they say they received their regular salary again in 2018. The alleged shortages ranged from about $500 to several thousand, depending on base pay. It also says agencies involved in Wave 1 and Wave 2 did pay the arrearage created by the changeover to all elected officials.

“In other words, elected officials got a one-time payment to correct their arrearage,” the notice states. “Public employees got told they will get it back over time. This is illegal and improper.

“Wages are due when earned, except that public employees are allowed one pay in arrears (which occurs at the beginning of employment). To be clear, the payment to elected officials was proper. What is illegal is the failure to pay the public employees for the same arrearage created in their pay.”

A Sept. 13, 2015, letter from Legislative Auditor and Legislative Manager Aaron Allred addressed some “areas of concern,” including the governor’s salary.

“Code … sets the governor’s calendar year salary at $150,000,” Allred wrote. “With the conversion to a bi-weekly pay period the governor earned $150,206.04 during FY (Fiscal Year) 2015, however he would have received less than $150,000. The governor’s office verbally informed me that they forced an increase to the governor’s final paycheck in FY 2015 for the difference between his annual salary and the actual amounts paid during FY 2015. Conversely, other state employees did not receive the same consideration.”

Allred’s letter also mentions that about every 11 years, there would be a year that would have 27 pay periods instead of 26. And that in 2023, the next such year, the state would need an additional $33 million for that extra pay period.

“There are only a few universal truths in life, but one of them is you don't mess with people's paychecks,” Toriseva previously told The Record. “The West Virginia Auditor created an arrearage in pay for many, and maybe all, public employees, when payroll switched from twice monthly to every two weeks.

“However, a one-time payment to clear the arrearage was made to elected officials only. Public employees want what they have earned, too. It's calculable.

“Elected officials were paid. Why weren’t their salaries employees paid?"

By changing the pay period in which the salaried employees are paid, an underpayment to each salaried employee was created in 2017 that has not been remedied.

“This problem is so well known that hotlines were created and countless hours of time has been spent by the auditor’s office trying to convince employees that the underpayment is allowed and proper,” according to a letter sent by the plaintiff’s attorney notifying the state of the pending lawsuit.

“We know that thousands of salaried state employees did not receive their full wages in the year of the payroll changeover,” Toriseva told The Record after the Jan. 25 hearing. “The exception was elected officials. They got paid. The State of West Virginia made sure that all elected officials received a bridge payment to make up for their pay deficiency while allowing a shortfall in the payment of its salaried employees.

“It is certainly a violation of West Virginia law to not pay state employees the wages that are due. The state’s action in making sure that the Governor, Treasurer, State Auditor and other elected officials received their full pay clearly shows that the state was aware that the bridge payment needed to be made to correct the deficiency caused by the changeover.

“Despite this knowledge, they continue to this day to withhold payments that are due and forced employees to file this lawsuit.”

Despite the lawsuit, the auditor's office stands behind how it has handled the situation.

“Although it is our general policy to not publicly comment regarding potential or ongoing litigation, we have received notice from media sources of a potential claim concerning the state’s conversion to biweekly pay," Hopkins told The Record last year before the case officially was filed. "We are confident that the conversion was executed in compliance with statutory requirements and in accordance with agency directives and the law and that all State employees were paid for every hour worked."

The lawsuit sought to gain full lost wages and benefits to all affected salaried employees plus other compensatory and general damages, interest from the date the funds should have been paid along with court costs and attorney fees.

The plaintiffs are being represented by Toriseva of Toriseva Law In Wheeling; Michael Ranson and Cynthia Ranson of Ranson Law Offices in Charleston; G. Patrick Jacobs of Jacobs Law Office in Charleston; and Robert McCoid of McCamic, Sacco & McCoid in Wheeling.

Kanawha Circuit Court case number 18-C-549

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West Virginia Supreme Court of AppealsKanawha Circuit Court

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