SC Administrative Law Court Decisions

This matter is before the Administrative Law Judge Division (Division or ALJD) for a contested case hearing pursuant to S.C. Code Ann. §§ 41-10-40 and 41-10-80 (1986 & Supp. 2000), S.C. Code Ann. § 41-3-610 (1986 & Supp. 2000), and S.C. Code Ann. §§ 1-23-310, et seq. (1986 & Supp. 2000). The South Carolina Department of Labor, Licensing and Regulation - Division of Labor (Department) contends that Respondent Race Trac violated the South Carolina Payment of Wages Act (the Act). More specifically, the Department contends that the Respondent violated certain provisions of S.C. Code Ann. § 41-10-30 (1986 & Supp. 2000) (entitled "Notification of employees of wages and hours agreed upon; recordkeeping requirements; requirement of itemized statement of gross pay and deductions for each pay period") and S.C. Code Ann. § 41-10-40 (1986 & Supp. 2000) (entitled "Medium of payment; deposit of wages to employee's credit; prohibition against deductions in absence of written notice; time and place of payment"). Pursuant to S.C. Code Ann. § 41-10-80 (1986 & Supp. 2000), the Department seeks to levy a fine in the amount of Seven Hundred ($700.00) Dollars against the Respondent. A hearing on this matter was held on October 24, 2001, at the offices of the Division in Columbia, South Carolina.

Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, taking into consideration the burden of persuasion by the parties, I make the following Findings of Fact by a preponderance of the evidence:

1. Notice of the time, date, place and nature of this hearing was timely and properly given to all parties.

2. Race Trac is a convenience store that hires employees by the hour.

3. April Thompson was allegedly hired to work at the Rock Hill Race Trac by Heather Lore, the manager of that location prior to March 19, 2001. Ms. Thompson filed this complaint with the Department on or about April 10, 2001, against Race Trac claiming she was owed wages for twenty-four (24) hours of work performed for which Race Trac failed to pay her on March 19, 2001. On March 19, 2001, the date upon which Ms. Thompson was to receive payment, Robert McCroskey was the acting manager of this location. Mr. McCroskey was transferred into the Rock Hill store on March 19, 2001 after Heather Lore, the previous manager, departed that position on or about March 18, 2001, without notice to the Respondent.

After the Department received Ms. Thompson's complaint, Mark Sanders, an investigator with the Department's Division of Labor, contacted Mr. McCroskey by telephone at the Rock Hill Race Trac. Upon researching the employee files available at the location, Mr. McCroskey indicated to Mark Sanders that he could not find any records on Ms. Thompson and referred Mr. Sanders to Race Trac's corporate attorney, Ron Matonate, in Georgia. Upon further talks with Mr. McCroskey and Mr. Matonate, Mr. Sanders was verbally informed that no employment records or time sheets could be found on Ms. Thompson either at the location or at corporate headquarters.

Subsequent to the initiation of this investigation by the Department, Race Trac conducted its own probe into whether or not Ms. Thompson was actually its employee. Helen Brewster, an area supervisor for the Respondent, tried to contact Heather Lore to discuss Ms. Thompson's employment while Ms. Lore was manager. However, Ms. Lore would not cooperate. Furthermore, an examination of the employment records at the Rock Hill Race Trac revealed that Ms. Thompson's paperwork was the only paperwork missing - Ms. Lore had kept somewhat accurate records on all other employees under her supervision while serving as manager. At the very least, each employee she managed was on file with corporate offices. Also, the Respondent had never previously issued a pay check to Ms. Thompson. ⁽¹⁾

4. In conducting his investigation into the alleged failure to pay wages to Ms. Thompson, Mr. Sanders was verbally informed that Race Trac failed to complete the paperwork at the time Ms. Thompson was hired. However, that comment was made by Race Trac employees at the initial stage of responding to the Department's complaint who assumed that Ms. Thompson was an employee. As noted above, Race Trac's own investigation later revealed that the evidence did not support the determination that Ms. Thompson was indeed an employee of Race Trac. Furthermore, Mr. Sanders did not conduct an on-site visit of the Rock Hill Race Trac, and, therefore, did not personally inspect the location's files or personally observe these violations.

5. The Respondent has specific employment policies, found in its employee handbook and training materials, that it requires its employees to follow. Upon hire, managers are required to attend training classes explaining how to maintain paperwork, how to interview new hires, and how to run a location - from supervising employees to stocking the store. Managers and supervisors are required to attend additional training classes approximately every two (2) months. Also, it is Race Trac's practice to inform its employees of their conditions of employment, including wages and time and place of payment, in writing upon hire. Furthermore, managers are always on call to work at the location if an employee calls in sick or just does not show up for their shift.

6. The Respondent was previously warned and subsequently cited for violating the South Carolina Payment of Wages Act in September and October of 1998 for failing to pay and failing to give an employee written notification of terms of employment. The Department maintains that this violation constitutes a "second" violation of the Act. For this violation, the Respondent was fined Seven Hundred ($700.00) Dollars by the Department.

Based on the foregoing Findings of Fact, I conclude the following as a matter of law:

1. Pursuant to S.C. Code Ann. §§ 1-23-310, et seq. (1986 & Supp. 2000), S.C. Code Ann. § 41-3-610 (1986 & Supp. 2000), and S.C. Code Ann. § 41-10-80 (1986 & Supp. 2000), the Administrative Law Judge Division has jurisdiction to hear this contested case.

2. In weighing the evidence and deciding a contested case on the merits, the Administrative Law Judge must make findings of fact and conclusions of law by a preponderance of the evidence. Anonymous (M-156-90) v. State Bd. of Medical Examiners, 329 S.C. 371, 496 S.E. 2d 17 (1998).

3. Chapter 10 of Title 41 of the South Carolina Code, entitled "Payment of Wages," applies to all employers in South Carolina except that § 41-10-30 does not apply to employers of domestic labor in private homes or employers employing fewer than five employees at all times during the preceding twelve months. S.C. Code Ann. § 41-10-20 (1986 & Supp. 2000). Therefore, Chapter 10 of Title 41 is applicable to Race Trac.

4. Wages are afforded a special "protected" status under the law. The South Carolina Payment of Wages Act is "remedial legislation designed to protect working people and assist them in collecting compensation wrongfully withheld." Dumas v. InfoSafe Corp., 320 S.C. 188,194, 463 S.E.2d 641, 645 (Ct. App. 1995).

5. S.C. Code Ann. § 41-10-30 (1986 & Supp. 2000) sets forth:

(A) Every employer shall notify each employee in writing at the time of hiring of the normal hours and wages agreed upon, the time and place of payment, and the deductions which will be made from the wages, including payments to insurance programs. The employer has the option of giving written notification by posting the terms conspicuously at or near the place of work. Any changes in these terms must be made in writing at least seven calendar days before they become effective. This section does not apply to wage increases.

(B) Every employer shall keep records of names and addresses of all employees and of wages paid each payday and deductions made for three years.

(C) Every employer shall furnish each employee with an itemized statement showing his gross pay and the deductions made from his wages for each pay period.

6. S.C. Code Ann. § 41-10-40 (1986 & Supp. 2000) sets forth, in relevant part under subsection D, that "[e]very employer in the State shall pay all wages due at the time and place designated as required by subsection (A) of Section 41-10-30."

7. The Department contends that Race Trac failed to pay April Thompson wages due to her within a reasonable amount of time of Race Trac's regular pay day, and thus, violated Section 41-10-40(D). The Department further contends that Race Trac violated Sections 41-10-30(A) and (B) because, upon the Department's commencement of its investigation, the Respondent could not find any employment records on April Thompson and therefore could not prove that she had indeed received written notification of her hours, wages, and time and place of payment.

Ms. Thompson's complaint did not specify the times, dates and/or hours she worked at Race Trac. She simply alleged she was owed pay for working twenty-four (24) hours at the location. The Department's evidence presented at the hearing consisted of "admissions" made by Robert McCroskey, acting manager of this location, in which Mr. McCroskey informed the Department's investigator, Mark Sanders, that there were no employee records on Ms. Thompson in that store. Furthermore, when Mr. McCroskey referred Mr. Sanders to Race Trac's corporate attorney, Ron Matonate, Mr. Matonate confirmed the same. However, it stands to reason that if Ms. Thompson was not an employee of the store, there would be no records of her employment. Also, neither Mr. Sanders nor anyone else from the Department conducted an on-site visit at the location. There was no evidence from Ms. Thompson herself, any employee who worked with Ms. Thompson, or the former manager who allegedly hired Ms. Thompson to substantiate these violations. As set forth above, Mr. McCroskey was not even working at the Rock Hill location while Ms. Thompson claims she worked there - the two never worked together. Based on the foregoing, I find that the evidence did not establish that April Thompson was an employee of the Rock Hill Race Trac.

8. The Department further contends that the Respondent violated Section 41-10-30(A) by failing to conspicuously post terms of employment - with regard to Robert McCroskey and April Thompson, based on Mr. McCroskey's verbal recitation to Mr. Sanders that he did not maintain regular hours and that this information was not posted at the location. However, as noted above, the evidence did not establish that Ms. Thompson was an employee of the Rock Hill Race Trac. Therefore, there can be no violation for failing to inform Ms. Thompson of the notification requirements of Section 41-10-30(A). I further find that because Mr. McCroskey as manager was always on call to work at the location, no violation of Section 41-10-30(A) occurred because his "terms" were not conspicuously posted at the location.

Therefore, based on the foregoing analysis, I find that no violation of the Act occurred. ⁽²⁾

Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby:

ORDERED that no fine shall be imposed by the Department against Race Trac for violations of S.C. Code Ann. §§ 41-10-30(A) and (B) and 41-10-40(D).

AND IT IS SO ORDERED.

______________________________

Ralph King Anderson, III

Administrative Law Judge

April 16, 2002

Columbia, South Carolina

1. Race Trac paid Ms. Thompson the wages she claimed she was due ($174.00) without an admission of liability.

2. Because I am ruling that no violations occurred, I am not addressing the Department's position that violations arising out of a single incident and/or investigation are themselves severable and distinct, and as such can carry with them individual fines. See S.C. Code Ann. § 41-10-80 (1986 & Supp. 2000).