CHARLESTON — The state Supreme Court has ruled a senior status circuit judge was correct in granting summary judgment to the state by rejecting an appeal from five state employees who claimed they were shortchanged by a payroll cycle change.
On April 20, the justices affirmed the ruling made last year by Judge Thomas Evans, who sided with the state and said the employees are not owed any pay. The employees had argued that the switch of pay cycles from twice a month to every two weeks left them missing some of their salaries.
“We fought hard for West Virginia state workers’ wages,” Teresa Toriseva, one of the attorneys representing the employees, told The West Virginia Record. “Our advocacy came up short, and it’s disappointing. But, the Supreme Court ruling has ended this lawsuit.”
Toriseva
The petitioners – Lisa Wilkinson, Heather Morris, Kathryn A. Bradley, Pamela Stumpf and Lula V. Dickerson – are five state employees, but the case could have affected up to 40,000 public employees. The respondents were Gov. Jim Justice, Auditor John B. McCuskey, former Treasurer John Perdue, Secretary of State Mac Warner, Attorney General Patrick Morrisey and state Supreme Court Chief Justice Evan Jenkins.
During the March 16 oral arguments, attorney Mike Ranson presented the case for the petitioners. He argued that the employee simply were not fully paid in the 2017 calendar year because of the state’s switch from twice monthly pay to biweekly. Bryan R. Cokeley presented the case for the respondents, who say the petitioners have identified no conduct that violates a clearly established law and, therefore, the state entities are entitled to qualified immunity.
The alleged incidents started before McCuskey took office. The case involved both salaried and hourly public employees.
In late 2019, Evans ruled in a state court case that the employees had not been shortchanged. That case focused on the state auditor’s office alleged failure to properly calculate and pay the wages of up to 40,000 public employees.
“I don’t accept the plaintiffs’ argument here,” Evans told attorneys at the Dec. 4 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.”
The petitioners were asking the Supreme Court to remand the case back to Kanawha County and to direct permissible discovery to occur along with a full development of evidence including testimony, if required, so Evans “will have a full factual development upon which a proper determination of the facts can then be performed in conjunction with the applicable law.”
The petitioners argued that Evans’ dismissal was inconsistent with the presented evidence, was erroneous and adversely affects the entire opinion. They say he erred by not permitting discovery on the amount of arrearage now owed to state employees resulting after the changeover in the payment of employees from bi-monthly to bi-weekly paychecks, by finding that the petitioners were only in arrears for 10 days of pay when that finding opposed the facts most favorable to the petitioners and when the petitioners are actually 15 days in arrears, by ruling the state could not violate the state Constitution because he did not allow discovery on payment to elected officials and by regarding the remaining claims of the petitioners because he incorrectly applied a 10-day arrearage when the arrearage is 15 days.
The respondents (the defendant state entities) said the petitioners had failed to establish that the state violated any laws, and they said the petitioners had failed to identify any clearly established laws that require all payments to state employees be made within the same calendar year they were earned. They said the petitioners’ claims were unsupported by law and disproven by their pay records, arguing that the petitioners' contention that state employees must be paid their salaries by the end of the fiscal and/or calendar year is not supported by any law.
“Petitioners' contention that they were underpaid is demonstrably false,” the respondents claimed. “Petitioners have identified no clearly established law that the respondents violated. Indeed, there is no clearly established law that requires payment be issued within a calendar or fiscal year.
“Rather, as discussed, clearly established, longstanding law requires that employees be paid in an arrearage. … This is required by – not contrary to – West Virginia law.”
A related federal class action was filed in early 2020. That case still is pending. It’s on appeal to an en banc panel after being dismissed by the 4th Circuit Court of Appeals.
“In the year of the changeover from 24 to 26 paychecks per year, West Virginia state salaried employees got cheated and their W-2s all reflect the loss,” Toriseva previously told The West Virginia Record. “From the governor, to the auditor and all the way down the line in all branches of government, elected officials got a special payment to make up the lost wages incurred when the payroll change happened.
“It’s not only grossly unfair to make up the missed payment to elected officials but not for state workers, it’s unconstitutional. We believe the lower court erred in throwing the case out.”
Court documents detail the history of how the state has paid employees. They also talk about the 2017 changeover from twice monthly to biweekly pay, which changed the number of checks employees received per year from 24 to 26.
The plaintiff/petitioner filing said employees were shorted in 2017, but went back to their proper salaries in 2018. It also said the state admits it took money of state employees, which it said is allowed by state code.
“That it is the State of West Virginia’s position that it can fail to pay said wages and simply redefine when the State of West Virginia will pay said wages in the future,” one complaint states. "That as a result, the State of West Virginia claims that it now ‘borrows’ over 40 percent of an employee’s paycheck to pay back the money that was ‘borrowed’ or taken during the (2017) conversion.
“That this ‘borrowing’ that is on a continuous basis places employees two pay cycles in arrears.”
The petitioners say state code says non-elected state employees are to be paid one cycle in arrears.
“Based on the State of West Virginia’s theory, anytime the State of West Virginia wants to ‘raise’ money, they can simply withhold wages that are due and owing and ‘reset’ the pay cycle to show payment of those unpaid wages in the future,” one complaint states. “As a result of no paying wages due and owing, the State of West Virginia has taken as much as $30,000,000.00 from the state employees.”
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 say 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, Toriseva says 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 a hearing last year. “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.”
The petitioners were represented by Toriseva of Toriseva Law In Wheeling; 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.
The respondents were represented by Anna F. Ballard, Evan S. Olds and Kelly Pawlowski of Pullin Fowler Flanagan Brown & Poe in Charleston (Justice); John L. MacCorkle and David P. Cook Jr. of MacCorkle Lavender in Charleston (McCuskey); Charles R. Bailey, Michael W. Taylor and Adam K. Strider of Bailey & Wyant in Charleston (Perdue); William E. Murray of Anspach Law in Charleston (Warner); William Slicer and Philip B. Sword of Shuman McCuskey & Slicer in Charleston (Morrisey); and Cokeley of Steptoe & Johnson in Charleston (Supreme Court).
Justice Tim Armstead disqualified himself from hearing the case because he was in the Legislature when the pay switch occurred. Circuit Court Judge Craig Tatterson took Armstead’s place on the bench.
West Virginia Supreme Court of Appeals case number 20-0295