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Experts on minimum wage law disagree about its effects

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The minimum wage bill has been causing some controversy over the last several days.

Many groups cannot agree with one another about whether the measure was good or bad for the business community.

According to some experts, the minimum wage bill (House Bill 4283) could deter businesses from coming to the Mountain State.

The wages would be increased to $7.25 an hour in 2015 and to $8.75 per hour by 2016.

Brian Peterson, a partner in the Martinsburg office of Bowles Rice LLP and in the firm's Labor and Employment Group, said March 25 the minimum wage bill could bring unexpected consequences to state employers.

"It will introduce a new level of legal compliance they haven't had to pay attention to in the past," Peterson said. "Employers will need to audit pay practices."

Peterson said West Virginia currently has a list of 19 exemptions under the law, as it is written. However, the federal minimum wage law has over 50 to accommodate for some special circumstances.

If West Virginia passes the minimum wage law, it could mean their law does not comply with federal regulations and could bring those consequences to some state businesses.

"If an employee is exempt form overtime in federal law and the same exemption doesn't exist in state law then the employee is still going to be entitled to overtime under the state law," Peterson said. 

He said one exemption that should exist, but does not, is for firefighters and police officers.

According to Peterson, firefighters could potentially have to be paid for hours of overtime that, under current law, they are not.

"It could be a big change for them," Peterson said. "(Municipalities) would have to start paying their firefighters overtime after 48 hours."

Peterson said he, like many others, would be concerned with the idea that businesses would go to other states before coming to West Virginia. 

"This could be something making West Virginia less competitive," Peterson said. "I want to locate where is the biggest benefit for me."

But not everyone agrees with the idea that the bill is written poorly. The West Virginia Center on Budget and Policy said they agree with the bill's intent.

According to the center, Peterson's thoughts on the bill contain many groundless claims. For example, Peterson states firefighters are not exempt from the state's overtime statute when West Virginia law specifically excludes firefighters from overtime pay.

West Virginia also was the only state that exempted virtually all employers from the state minimum wage.

Getting rid of the outdated exemption should be celebrated as win, making the state's labor law more transparent to employers and employees alike, according to Ted Boettner, executive director of the West Virginia Center on Budget and Policy. By striking the clause, for the first time "the code allows the state to protect workers by ensuring businesses comply with wage laws," he said.

And national officials are on the same page.

"This bill means that the state's minimum wage law actually covers employers in the state —which is a no-brainer," said Tsedeye Gebreselassie, staff attorney at the National Employment Law Project. "Many — if not a majority — of states have stronger worker provisions than the federal minimum wage law, including fewer exemptions and higher minimum wage rates among other provisions."

Others said Peterson fails to acknowledge employers will not be burdened with understanding these so-called new regulations. The West Virginia Division of Labor is charged with drafting a clear outline of the changes for businesses. Those rules have to be updated whenever the minimum wage changes and will presumably be published if the bill becomes law.

"The governor should not use (Peterson's opinion) to deny a much needed raise to over 125,000 hard working families," Boettner said. "If there are any small technical issues with the bill, these could easily be worked out during the legislature rules process.

"We should not throw out the baby with the bath water."

The bill is currently awaiting action from Gov. Earl Ray Tomblin.

The West Virginia Chamber of Commerce say federal exemptions would be stripped from the bill.

Employers in West Virginia with more than six employees will have to follow state minimum wage laws, instead of the federal standards which most employers follow, they said.

Under federal law, a salary test exists which states that employees who are salaried and highly compensated do not have to be paid overtime if they work more than 40 hours a week.

The chambers says school systems have contacted them and are worried about how this law will affect their personnel costs. They believe many salaried individuals employed in professional services who are not currently eligible for overtime could become eligible if this bill becomes law.  Additionally, employers will have to carefully review overtime policies because many employees who are currently exempt from overtime rules might become subject to overtime rules.  Changes to overtime rules will take effect on June 6, 2014.