A switch to 26 biweekly pay periods a year for salaried state employees may be illegal, since employees effectively receive a bonus for the 365th day of each year, legislative auditors said Sunday.
State law prohibits paying salaried state employees before services have been rendered, and Legislative Services attorney Doren Burrell told legislators the switch from twice monthly to biweekly pay creates a situation in which those employees are "essentially paid twice" for the 365th day each year.
"It's not legal under state law," Burrell told the legislative Post-Audits committee.
The new pay schedule means that an employee with a salary of $26,100 will receive an additional $100.38 of pay each year, he said.
Legislative Manager Aaron Allred said the state auditor's office and other boards working on the transition to biweekly pay have said there would be "significant" costs to recalculate the 26 14-day pay periods to incorporate the 365th day, but Allred said he doubts that.
"It should be a very small cost in programming," he said.
Legislative leaders Sunday again called on state officials to halt the next wave of employees set to transfer to biweekly pay in December until the issue can be resolved. The first wave of about 9,000 employees were switched to biweekly pay in June.
"We intend to pay every dime we owe every state employee, but we don't intend to find $4 million or $5 million [a year] in the state budget to handle the decimal point," Senate President Bill Cole, R-Mercer, said.
The 364-day year creates a situation where, every 11th year, salaried employees would receive 27 paychecks, at a current estimated cost of $55 million.
"If the Auditor wants to divide salaries by 26, which we believe is illegal, the Auditor should come before the Legislature and request approval," Allred said, saying he believes a change in state law is needed if the state is to adopt the Auditor's new biweekly pay schedule.
Also during legislative interim meetings Sunday:
n Consolidated Public Retirement Board executive director Jeff Fleck told members of the Joint Committee on Pensions and Retirement it now appears the earliest a new Internal Revenue Service regulation defining "normal retirement age" as age 62 could take effect in West Virginia would be after the 2017 legislative session.
First proposed by the IRS in 2007, and with its implementation delayed several times, the regulation has raised concerns among state and public school employees, since it could overturn the Rule of 80 in state retirement law, which allows employees to retire as early as age 55 if their age and years of service equal or exceed 80.
"It would be quite some time before these regulations are revised and are in effect," Fleck said Sunday.
n West Virginia Municipal League executive director Lisa Dooley told legislators that municipal Home Rule legislation has been a success.
"The Home Rule program is successful, and it's not an empowerment of municipal governments," she told the Joint Committees on Government Organization and Government Operations.
Dooley said critics unfairly call Home Rule "a tax increase on citizens," but said city leaders who adopt municipal sales taxes without backing of their constituents do so at their peril.
"Your office may be on the line if the citizens don't agree with that," she said. "That's the beauty of Home Rule."
Reach Phil Kabler at philk@wvgazettemail.com, 304-348-1220, or follow @PhilKabler on Twitter.