By Brian Skinner, Esq.
The 2021 regular session of the West Virginia Legislature saw a continuation Republican supermajority’s efforts to transform the state’s labor laws by passing legislation on the classification of workers, the regulation of contractors, the manner in which public employee union dues may be collected and clarifying that work stoppages by public employees are unlawful.
Classification of workers was the subject of Senate Bill 272, the West Virginia Employment Law Workers Classification Act, which Governor Jim Justice signed into law on March 19, 2021, and which goes into effect on June 9, 2021. The bill provides standards for determining who is an employee and who is an independent contractor under certain West Virginia statutes.
The intent of the Workers Classification Act is to “ensure that workers who are indeed ‘employees’ are properly classified” and “afforded the legal protections and obligations that apply to [employees], and that workers who desire to be, and meet the standards of being, independent contractors will be entitled to the freedoms that such a relationship provides, which will reduce unnecessary and costly litigation and confusion in the workforce marketplace and in the courts.”
The new law applies only to workers’ compensation, unemployment compensation, the Human Rights Act, and the Wage Payment and Collection Act, and has no application to other areas of law. Additionally, there is a specific exception for on-demand drivers and organizations, such as Uber or Lyft.
The lynch pin of the Workers Classification Act’s test of whether a worker is an independent contractor is the requirement that a worker sign a written contract with the principal that states the principal’s intent to engage the services of the person as an independent contractor and contains acknowledgements that the person understands that he or she is:
- Providing services for the principal as an independent contractor;
- Not going to be treated as an employee of the principal;
- Not going to be provided by the principal with either workers’ compensation or unemployment compensation benefits;
- Obligated to pay all applicable federal and state income taxes; and
- Responsible for the majority of supplies and other variable expenses that he or she incurs in connection with performing the contracted services.
In addition to the written contract requirement, the Workers Classification Act further requires that in order to be classified as an independent contractor the person must file or be contractually obligated to file an income tax return in regard to the fees earned from the work; or the person provides their services through a business entity and directly controls the manner and means by which the work is to be accomplished and the person satisfies three or more of nine listed criteria.
The Workers Classification Act is substantially based on model legislation advocated by the American Legislative Exchange Council or ALEC.
An ongoing effort to reform contractor licensing culminated in the passage of the West Virginia Contractor Licensing Act (H.B. 2006), which was approved by the Governor on March 27, 2021, and is effective on June 15, 2021. The legislation transfers the administration of the contractor licensing from the Division of Labor to a newly independent West Virginia Contractor Licensing Board. The board will regulate the minimum qualifications specified classes of contractors including:
- Electrical contractor;
- General building contractor;
- General engineering contractor;
- Heating, ventilating, and cooling contractor;
- Multifamily contractor;
- Piping contractor;
- Plumbing contractor;
- Residential contractor; and
- Specialty contractor.
For the first 24 months, board must contract with the Division of Labor to provide, inspection, enforcement, and investigative services under board’s authority. After 24 months, the board will be responsible for providing its own inspection, enforcement, and investigative services.
The board has the authority to grant licenses of the same or equivalent classification to contractors licensed by other states, without written examination upon satisfactory proof furnished to the board that the qualifications of the applicants are equal to the qualifications of holders of similar licenses in West Virginia.
The Contractor Licensing Act prohibits municipalities and counties from requiring any additional occupational license or other evidence of competence as a contractor, other than that contained in the Contractor Licensing Act.
House Bill 2008, approved by the Governor on March 27, 2021, updates the requirements for licensure for elevator mechanics, crane operators, HVAC, electricians, and plumbers. The bill is effective on June 16, 2021.
Three bills enacted by the legislature apply only to public employees. The first affects the way union fees are collected. House Bill 2009, signed by the Governor on March 30, 2021, effective June 17, 2021, prohibits state, county and municipal governments, including boards of education, from making deductions or assignments of the earnings of their officers or employees for union, labor organization, or club dues or fees. There is an exception to this prohibition for municipal employees covered by a collective bargaining agreement with a municipality which is in effect on July 1, 2021.
Senate Bill 11, which became law without the Governor’s signature and is effective on June 2, 2021, explicitly declares any work stoppage or strike by public employees to be unlawful. The legislation provides criteria to be used to determine when an employee should be considered to be participating in a work stoppage or strike and makes participation in a work stoppage grounds for termination.
The legislation requires county boards of education to withhold the prorated salary or hourly pay of each employee participating in the concerted work stoppage or strike for each day that such employee participates in a concerted work stoppage or strike, and such sums shall be forfeited to the county board of education.
The bill also prohibits the use of accrued and equivalent instructional time to cancel days lost due to a concerted work stoppage or strike and prohibits a waiver by the State Board for a county board of education’s noncompliance with the employment and instructional term requirements if the noncompliance is the result of a concerted work stoppage or strike.
A third bill that impacts public employees is H.B. 2011 which eliminates the current hour requirement defining for part-time and temporary personnel. Currently, personnel employed for 1,000 hours or less during a working year are considered part-time and employees in the state forests, parks, and recreational areas working less than 1,733 hours per calendar year are considered seasonal or temporary.
Finally, a bill that would have impacted the public’s ability have access to wage records filed with any government agency, including the West Virginia Division of Labor, failed to cross the finish line. Senate Bill 370, which passed the Senate but died in the House on the final night of the session, would have prohibited the Division of Labor from disclosing any document filed or submitted to the division that includes records of actual wages paid to employees.
Opponents of the bill argued that it would make it virtually impossible for citizens to ensure that employers are complying with the West Virginia Jobs Act. The Jobs Act requires that at least seventy-five percent of employees for public improvement construction projects domiciled in the local labor market. Proponents of the bill argued that wage information should be confidential since it might give competitors an unfair advantage in bidding situations, and that the Division of Labor is capable of regulating compliance with the Jobs Act.
Brian is the former counsel to the West Virginia House of Delegates Judiciary Committee and counsel to the West Virginia Senate Minority Caucus. He was also general counsel to the West Virginia State Health Officer and Commissioner for the Bureau for Public Health. He has almost two-decades of experience as a strategic advisor and chief legal counsel to both executive and legislative branch public officials.