ORDERS:
FINAL ORDER AND DECISION
I. Introduction
The South Carolina Department of Labor, Licensing and Regulation, Division of Labor (LLR) seeks
to impose a fine of $200 on Greenwood Internal Medicine (GIM) due to GIM’s failure to give an
employee at least seven days written notice of the terms and the amount of deductions to be withheld
from the employee’s wages. GIM opposes the fine.
GIM argues that no violation occurred since
timely written notice was given to the employee. I agree with GIM.
II. Analysis
A. Findings of Fact
I find by a preponderance of the evidence the following facts:
GIM is a physician’s medical practice in Greenwood, South Carolina. As a benefit to its full-time
employees, the practice provides health insurance by paying the insurance premium needed to provide
for the employee’s coverage. The benefit is limited to those full-time employees who are not on
unpaid leave.
The practice of not paying health insurance premiums for full time employees out on unpaid leave has
been a consistent practice of GIM. From the collective memory of GIM staff, only three cases of
unpaid leave (including the instant matter) are known. In each case the employee was liable for the
employee’s medical insurance premiums. Indeed, under the employee handbook, granting requests
for both unpaid medical leave as well as unpaid personal leave are discretionary with each case
reviewed on an individual basis and granted or denied on terms established by GIM and made known
to the employee who receives permission for unpaid leave.
In the instant case, a full-time employee working as GIM’s Laboratory Manager (manager) requested
an unpaid leave from August 1, 2001 until December 26, 2001. The request was granted and the
employee was told that she would be liable for payment of her health insurance premiums. Having
full knowledge of her obligation, the employee requested that GIM continue to pay her health
insurance premium and further that GIM also continue to pay her short term disability premium, a
premium the employee had always been liable for but which GIM had withheld from the employee’s
pay. Finally, the employee requested that she be allowed to repay GIM for its expenditures on her
behalf by GIM withholding $50 from her paycheck when she returned to work. GIM agreed.
The manager returned to work shortly after Christmas 2001. On January 10, 2002, the earnings
statement and pay check provided to the employee by GIM stated in writing that the amount owed
to GIM for the previous payment of premiums for health insurance was $816 and for short term
disability was $106.40 giving a total due of $922.40.
Over the succeeding pay periods, GIM withheld the agreed upon funds from the manager’s pay until
the debt was paid. Each earnings statement given to the employee stated the remaining balance due.
At no time did the employee disagree with the amount owed and at no time did she assert to
management that the amount was not owed.
Some time after the GIM debt was paid, the manager left her employment and still later she filed a
complaint with LLR asserting that the withholding was improper. LLR investigated and determined
that two violations of S.C. Code Ann. § 41-10-40(C) occurred. LLR now seeks penalties of $200.
2. Conclusions of Law
"An employer shall not withhold or divert any portion of an employee's wages unless the employer
. . . has given written notification to the employee of the amount and terms of the deductions as
required by subsection (A) of § 41-10-30." S.C. Code Ann. § 41-10-40(C) (Supp. 2002). Under S.C.
Code Ann. § 41-10-30(A) (Supp. 2002) “[e]very employer shall notify each employee in writing at
the time of hiring of . . . the deductions which will be made from the wages, including payments to
insurance programs [and] . . . [a]ny changes in these terms must be made in writing at least seven
calendar days before they become effective.” Here, LLR argues that GIM altered the deductions
being made from an employee’s wages without providing that employee seven days notice that the
deduction would be made.
I cannot agree with LLR. Under the facts of this case, the employee had notice in writing well in
excess of seven days.
Here, the evidence shows that when an employee asks for an extended period of leave without pay,
GIM exercises discretion in deciding to grant or deny the request and in making its decision examines
each request on a case by case basis. In the instant case GIM agreed to grant the request but did so
on the condition that during the extended leave GIM would pay the employee’s medical insurance
premiums and the employee’s short term disability premiums so long as the employee agreed to
reimburse GIM when the employee returned to work. The employee agreed to the arrangement.
Further, she recognized her liability since she was the one who asked GIM to withhold the required
funds from her pay after she came back to work. Finally, the evidence shows that all involved agreed
upon a withholding rate of $50 per pay period.
Upon returning to work, the employee received on January 10, 2002, in writing, a notice stating that
she owed $916.40 to GIM. At the time of the written notice, no withholding had been made.
Therefore, when combined with the fact that the employee had requested that GIM make the
withholding, the written notice of the amount owed constitutes compliance with the statutory duty
to provide written notice to the employee at least seven days prior to making the withholding.
Indeed, not only was notice given before the first withholding occurred but also each pay check
continued to provide written notice of the amount remaining due. Thus, GIM went beyond the
requirements of the statute since GIM provided a continuing written employee notice on each pay
check that $50 would be deducted from the next pay check and in each instance did so with more
than seven days notice before the withholding occurred.
III. Order
The fine of $200 imposed by the South Carolina Department of Labor, Licensing and Regulation,
Division of Labor against GIM is improper. Accordingly, no fine is due.
AND IT IS SO ORDERED.
______________________
RAY N. STEVENS
Administrative Law Judge
Dated: September 16, 2003
Columbia, South Carolina |
