The West Virginia Bureau of Labor, the predecessor to the modern Division of Labor, was created by the state legislature in 1889. The rapid increase in the number and variety of factories and the growth in industrial development had dictated a need for a state agency to monitor and report on issues affecting business and employment. Labor organizations strongly promoted the need for a state labor agency and pushed the appointment of Richard Robertson, editor of a Wheeling newspaper, as the first commissioner of labor. Governor Emanuel Wilson instead chose Edward Robertson, twin brother to Richard and the superintendent of the penitentiary at Moundsville, for the post. Speculation was that Wilson, a Democrat, was displeased with the Republican views Richard Robertson expressed in his newspaper.

Though its duties were relatively minor at its creation, issues relating to safety, working hours and working conditions, the employment of children, reporting of statistical data relating to industrial production, and the regulation of weights and measures eventually fell under the purview of the Bureau of Labor. From 1889 to 1914, the Bureau of Labor maintained its offices in Wheeling, unlike other executive departments of government. While the official reason is not clear, Wheeling was the largest city in the state until well into the 1900s; it was the center of West Virginia's Upper Ohio Valley industrial region; and, until after the United Mine Workers successfully organized the Kanawha and New River coalfields, had the largest concentration of unionized workers in the state. By 1914, the state's economic focus had shifted to southern West Virginia and Commissioner of Labor Jack H. Nightingale established offices in the state capitol on June 1, 1914.

The Bureau of Labor became the Department of Labor in 1930. The chief official has been known as the commissioner of labor since the inception of the Bureau. In the first of Governor Gaston Caperton's two terms, the Department of Labor became the Division of Labor and was included in the newly created Department of Commerce. The current Division of Labor organization places its legislatively mandated responsibilities in section sub-groups: Licensing, Safety, Wage and Hour, and Weights and Measures. The safety section enforces codes related to the state Occupational Safety and Health Act and also certifies elevators and escalators, amusement park rides, and boilers. The division also enforces the state law that prohibits the hiring of undocumented workers by West Virginia employers.

In 2023, there were 192 employees in the Division of Labor. The agency is headquartered at the capitol complex in Charleston.