SC Administrative Law Court Decisions

This matter is before the Administrative Law Judge Division (Division) for a contested case hearing pursuant to S.C. Code Ann. §§ 41-10-40 and 41-10-80 (Supp. 2001), S.C. Code Ann. § 41-3-610 (Supp. 2001), and S.C. Code Ann. §§ 1-23-310, et seq. (Supp. 2001). The South Carolina Department of Labor, Licensing and Regulation, Division of Labor (Department) contends that Respondent Tom Sawyer Company violated the South Carolina Payment of Wages Act. More specifically, the Department contends that the Respondent violated certain provisions of S.C. Code Ann. § 41-10-40 (Supp. 2001) (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 (Supp. 2001), the Department seeks to levy a fine in the amount of Two Hundred ($200.00) Dollars against the Respondent. A hearing on this matter was held on March 28, 2002, 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. Tom Sawyer Company is a public relations firm owned and operated by Carolyn Sawyer. The company at the time of this incident had four employees.

3. Vera Jackson and Alecia Brown were employees of the Tom Sawyer Company. Vera Jackson accepted the position of Office Coordinator with the company on July 19, 2000. Alecia Brown was hired by the company on April 6, 2001. Ms. Jackson resigned on September 24, 2001. Ms. Brown's employment was terminated on September 27, 2001, effective back to September 24, 2001.

4. Payday was also on September 24, 2001. When Ms. Jackson and Ms. Brown

attempted to cash the paychecks, there were not sufficient funds in the account to cash them. Regardless, the checks were deposited and when Jackson and Brown checked later to see if they had been paid, a stop payment order had been placed on the checks by the company.

5. Ms. Sawyer testified that she had been out of town for a period of time and when

she returned she did not know what was happening. The office was locked, there was an angry letter of resignation from Ms. Jackson and there were no funds in the bank account. She states she froze the bank account until she could determine what was occurring with the business. The paychecks were re-issued to Ms. Brown and Ms. Jackson on October 15, 2001.

6. On November 5, 2001, the Department issued a Citation and Notification of Penalty against the Tom Sawyer Company and assessed a monetary penalty of $200.00. This was based on the finding that the company failed to pay wages due two employees on the regular payday of September 24, 2001. The amount the company failed to pay was $3,307.70. This amount included wages due and four days of vacation for Ms. Jackson. ⁽¹⁾

CONCLUSIONS OF LAW

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. (Supp. 2001), S.C. Code Ann.

§41-3-610 (Supp. 2001), and S.C. Code Ann. § 41-10-80 (Supp. 2001), 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 (Supp. 2001)(emphasis added).

4. S.C. Code Ann. § 41-10-40 (Supp. 2001) 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 § 41-10-30." 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 (Supp. 2001) 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. The Department contends that Tom Sawyer Company failed to pay Vera Jackson and Alecia Brown wages due on the scheduled payday and thus violated §41-10-40(D). However, §41-10-40 (D) refers to §41-10-30 as the place of designation for time and place of paying wages. Section 41-10-20 (2) makes §41-10-30 not applicable to any employer employing fewer than five employees at all times during the preceding twelve months. There is no evidence that Tom Sawyer Company employed five or more employees on September 24, 2001 or at any time in the year previous to September 24. On September 24, 2001, Tom Sawyer Company had four employees. If the company has no duty to give written notification pursuant to §41-10-30 (A), it cannot be penalized for failing to "pay wages due at the time and place designated as required by subsection (A) of §41-10-30." If there is no duty to designate a time, there can be no penalty for failing to pay at the designated time. Thus, the issue becomes one of applying the meaning of the words "shall pay wages due at the time and place designated as required by subsection (A) of §41-10-30."

7. As South Carolina courts have consistently noted, "[w]hen the terms of a statute are

clear and unambiguous, the Court must apply them according to their literal meaning. Furthermore, in construing a statute, words must be given their plain and ordinary meaning without resort to subtle or forced construction to limit or expand the statute's operation." Brown v. State, 343 S.C. 342, 348, 540 S.E.2d 846, 850 (2001) (citations omitted); see also Rowe v. Hyatt, 321 S.C. 366, 468 S.E.2d 649 (1996); First Baptist Church of Mauldin v. City of Mauldin, 308 S.C. 226, 417 S.E.2d 592 (1992). Finally, any statute that inflicts a penalty will be strictly construed against the state. Lund vs. Gray Line Water Tours, Inc., 277 S.C. 447, 289 S.E.2d 404 (1982).

8. Section 41-10-40 (D) is only applicable to employers who are "required by

subsection (A) of §41-10-30" to pay wages at a time and place designated in writing. The plain meaning of "required" is needed or essential. The American Heritage Dictionary of the English Language (4^th ed. 2000). Also, "require" is defined as to direct, order, demand, instruct, command, claim, compel, request, need, or exact. Black's Law Dictionary 1172 (5^th ed. 1979). "Thus, the coverage of §40-10-40 (D) is only to those employers for which §41-10-30 commands written notice to the employees. To read the statute any other way ignores the plain language and results in a harsh and unreasonable view that a party not covered by this notice requirement of §41-10-30 is nonetheless required to pay wages in accordance with a notice it was not required to issue." South Carolina Department of Labor, Licensing and Regulation, Division of Labor vs. Feggins Tax and Business Services, 95-ALJ-11-0604-CC (December 27, 1995). Since the Tom Sawyer Company has less than five employees, it is not within the coverage of §41-10-30 and therefore, §41-10-40 (D) is not applicable to it.

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

ORDERED that the violation and fine imposed by the Department shall be dismissed. The statute under which the Respondent was charged, S.C. Code Ann. §41-10-40(D), is not applicable to the Respondent. Therefore, the penalty imposed pursuant to §41-10-80 cannot stand.

AND IT IS SO ORDERED.

______________________________

CAROLYN C. MATTHEWS

Administrative Law Judge

August 19, 2002

Columbia, South Carolina

1. The Department's position is that Tom Sawyer Company owed Ms. Jackson for her untaken vacation days on September 24, 2001 even though she did not tender her resignation until that day. Ms. Sawyer contends that she could not have paid the vacation pay on the 24^th because she did not know until after the checks were written that Ms. Jackson had resigned. The Department holds the company responsible for payment of the vacation leave on that day because it did not have a policy stating otherwise.