West Virginia News & Analysis

  • Deducting unreturned employer-provided property costs from wages

    For reasons dating back to the days of company towns and company stores, wages earned by West Virginia employees are protected by statute and rule from unauthorized deductions. Last year, however, the West Virginia Legislature addressed a subject that has been a common friction point at the end of the employer-employee relationship ― employees' failure to return employer-provided property.

    Wage assignments generally

    As an employer, you have been constrained by West Virginia law regarding the deductions you can make from an employee's wages. There are, of course, the standard deductions: taxes, union dues, insurance premiums, and charitable contributions. For those, no particular written agreement is required. Likewise, you may receive, from time to time, a wage garnishment from a third party. Rules have been on the books for years establishing how much you can withhold from wages due to a garnishment.

    Then, there are the rules if you want to deduct sums owed to you from an employee's wages ― for example, repayment over time of a tuition advance or a wage advance generally. To make those deductions, you are required to have the employee sign an agreement before a notary, no more than 25 percent of his net wages may be withheld, and the agreement is effective only for one year. After one year, a new written agreement needs to be put in place.

    New statute: 'employer-provided property'

    In 2018, the West Virginia Legislature provided a fourth avenue for deductions ― from final pay if an employee fails to return employer-provided property. Unlike the historical "wage assignment," the West Virginia Division of Labor (DOL) hasn't yet posted its version of a "property return agreement." Accordingly, you are left to parse through the statute and draft such an agreement.

    The new statute defines "employer provided property" as property that has been provided to the employee in the course of, and for use in, the employer's business, such as equipment, phones, computers, supplies, or uniforms. It must have a value in excess of $100. The Legislature's clear intent was to prevent employees from being nickeled and dimed on supplies such as pens, paper, and such. Moreover, if you provided "replacement tools" to the employee during the course of employment to replace her tools that were lost, then they don't fall within the purview of the statute. You cannot deduct for their cost.

    Written agreement

    To take advantage of your new wage deduction rights, you must have a signed written agreement with your employee. Unlike the wage assignment referred to above, there's no requirement this agreement be notarized. Nor does it expire after one year. And the withholding isn't limited to a certain percentage.

    An important date to note is May 15, 2018 ― the statute's effective date. For property provided to an employee after that date, you must have entered into the written agreement contemporaneously with the employee obtaining the property. The statute doesn't define "contemporaneous." Therefore, the common definition of "occur at the same time" may control. Consequently, you shouldn't wait until days after providing property to the employee before you collect a signature.

    Oddly, for property provided to employees before the effective date, the drafters didn't put a time limit on getting a signature. Thus, if you provided property to an employee on June 1, 2018, without a written agreement, then you cannot now take advantage of this new deduction protocol. Nor can you now put in place a noncontemporaneous agreement with her. If you provided the property on May 1, 2018, however, then you could require her to protect you from the nonreturn of the property at the end of employment by signing an agreement to that effect.

    The written agreement must contain the following:

    • Specific itemization of the employer-provided property, with a specified replacement cost;
    • A clear statement that such items are to be returned immediately upon discharge or resignation; and
    • A clear statement that, should she fail to timely return the property, then the replacement cost may be recovered by you from her final wages.

    One takeaway from the requirements is that you cannot base withholding from final pay on a general "property return" policy in either a handbook or personnel policy. Without specific itemization and cost disclosure, you would have to go to court to reclaim the property's value.

    The procedure

    At the time of an employee's discharge or resignation, you must notify her in writing of the property's replacement cost and make a demand that she return it by a certain date, not to exceed 10 business days. During that "notification period," you may retain the replacement cost of the property from her final net wages. If she returns the property by the deadline, then you must release the wages to her. The statute seems to allow you to reject the returned items if their condition, after three years, isn't consistent with their age and usage.

    An employee is entitled to provide a written objection to the withholding of wages by the deadline you set. If she objects, then you must place the withheld wages in an interest-bearing escrow account. If she doesn't file a civil action within three months, then she forfeits the wages, and they revert to you.

    A caveat

    If you are an employer with a union workforce, then you won't be able to take advantage of this new withholding statute. A section of the statute specifically states the "provisions shall not apply to employer-employee business relationships that are subject to, and governed by, collective bargaining agreements." Although not a model of clarity, a fair reading of the language is that the Legislature left to the negotiating process a rule by which you can deduct from final wages.

    In any event, a unionized employer, or any employer, can always go to court to seek the value of unreturned property, and this route is also available to the nonunion employer that still has a balance due after withholding from final wages.

    The form

    As mentioned, the West Virginia Division of Labor has drafted and published a sample form for wage assignments. As of this writing, however, it hasn't drafted a sample "property return" form. Based on the statute's requirements, we suggest the following form be used when providing employer-owned property to an employee:

    AUTHORIZATION TO DEDUCT FROM FINAL WAGES

    I, [printed name of employee], hereby acknowledge the following property has been provided to me by [printed name of employer] to be used by me in the course of my employment:



    Property

    Replacement Cost

    ________

    $_______________

    ________

    $_______________

    ________

    $_______________

    The above property is to be returned to [printed name of employer] immediately upon the end of the employment relationship.

    I further agree and acknowledge that, should I fail to timely return the above employer-provided property, then [printed name of employer] shall recover the replacement cost of the property from my final wages.

    Employee signature ______________

    Date ________

    Finally, the statute requires a second writing—a written notice to the employee at the end of employment in which there is a demand for the return of property. The suggested procedure is to attach the original agree­ment to a cover letter that sets a date, within 10 business days, for the property’s return. The letter and attach­ment can be handed to the employee at termination (pre­ferred) or sent by certified mail with return receipt re­quested. Please keep in mind you must “settle up” final wages with your former employees by the next regularly scheduled payday after termination. Accordingly, you must be prompt in demanding the property’s return.

    Bryan R. Cokeley can be contacted at 304-353-8116 or bryan.cokeley@steptoe-johnson.com.

  • Feedback: the gift that keeps on giving

    Looking for the perfect gift for your employees? Consider giving the gift of feedback. An overwhelming amount of information has been published on the benefits of feedback in the workplace in recent years. Studies consistently show employees crave more, real-time feedback and have become dissatisfied with the traditional annual review process.

  • Guns at work: keeping WV employees safe in troubling times

    According to the Occupational Safety and Health Administration (OSHA), nearly two million American workers report having been victims of workplace violence each year. In fact, the Bureau of Labor Statistics lists homicide as the fifth-leading cause of workplace fatalities in the United States, accounting for 8 percent of all fatal on-the-job injuries. Because tragic acts of violence occupy newspaper column inches and minutes of television news programming with seeming regularity, employers have focused attention on addressing workplace violence, especially incidents involving firearms.

  • Testing for THC in a medical cannabis and CBD-infused world

    As the use of cannabis products becomes increasingly lawful across the country and under federal law, employers' drug testing of employees becomes more complicated. Two factors in particular make testing difficult: the fact that no test reveals current intoxication and the fact that lawful CBD use can result in a false positive THC test result. Fortunately, there may be a solution to the latter problem, but unfortunately, the former conundrum remains.

  • What your CBD-prescribed employees don't know could hurt them (on a drug test)

    Q How should we handle a preemployment drug test that comes back positive for THC because of CBD oil prescribed to treat Lupus?

  • Whom are you hiring? Looking into an applicant's checkered past

    For good reason, you probably spend a significant amount of time worrying about legal compliance for the employees on your payroll. But what about those who didn't get the job? Some applicants might have simply lacked the necessary credentials, but others may have been weeded out through background checks. Many of you may consider criminal background checks a rote part of the application process, but they're absolutely critical to a safe and effective work environment.

  • How sweet it is: the smell of workplace harmony

    With summer comes the scent of newly cut grass, abundantly blooming flowers, and, if you're lucky enough to get away to the beach, sunscreen and the salty tang of the sea. In the office, freshly brewed coffee can be a welcome aroma that signals the start of a new workday. However, fragrances and scents don't bring joy to every employee, and HR may have to perform a delicate balancing act when addressing the significant challenge of achieving harmony over what the workplace smells (or doesn't smell) like.

  • Protecting yourself from your employment decisions

    We don't mean to stress you out, but you should be aware that every significant employment decision you make can be ripe with peril. Indeed, adverse actions by HR can lead to a lawsuit in which your decisions are twisted against you and second-guessed by a good attorney. But don't fret—there are steps you can take to support the employment decisions you're called on to make each day.

  • Do's and don'ts for private-sector WV employers that engage in political activity

    With the 2020 election quickly approaching, private-sector employers must stay up to date with the issues surrounding political activity in the workplace. This article provides an overview of West Virginia law addressing employees' right to engage in politics at work, including the conduct that's impermissible and permissible.

  • Safety is paramount during summer social gatherings

    Summer is traditionally a time for cookouts and other outdoor activities. Many employers have company picnics or hold other social gatherings during the summer months. Sometimes, alcohol is served at these events. While there's nothing necessarily wrong with serving alcohol at a company function, it bears repeating the safety warnings that can help you avoid potential liability for an alcohol-related mishap.