SC Administrative Law Court Decisions

I. Statement of the Case

This matter is a protest by Feggins Tax & Business Services, (Feggins), the Respondent, to citation 658-95 dated July 14, 1995. The penalty citation was issued by the South Carolina Department of Labor, Licensing and Regulation, Division of Labor, (Division), to the Petitioner, pursuant to S.C. Code Ann. § 41-10-80 (Supp. 1994). Feggins denies any penalties are due. This matter was heard on December 14, 1995, with jurisdiction granted the Administrative Law Judge Division under § 41-10-80(D), 26 S.C. Code Regs 71-6000 (to the extent a contested case hearing is granted), and the contested case provisions of S.C. Code Ann. § 1-23-600(E) (Supp. 1994).

I conclude as a matter of law that no penalties are applicable in the instant case ; and secondarily, even if penalties were due, only two violations are factually established. Any issues raised in the proceedings or hearing of this case but not addressed in this Order are deemed denied. ALJD Rule 29(B). Further, the filing of a motion for reconsideration is not a prerequisite to any party filing a notice of appeal of this Order. ALJD Rule 29(C).

II. Issues

Is Feggins liable for civil penalties under § 41-10-80 for violations of § 41-10-40(D) by failing to pay wages due at the time and place required by § 41-10-30(A)?

III. Analysis

A. Coverage of § 41-10-40(D)

1. Positions of Parties:

Feggins asserts § 41-10-40(D) is not applicable to her since she has never had five employees. Division asserts § 41-10-40(D) is applicable to all employers regardless of the number of employees.

2. Findings of Fact:

I find, by a preponderance of the evidence, the following facts:

1. Thomas became an employee of Feggins during January 1995.

2. Feggins employed fewer than five employees at all times during the preceding twelve months.

3. Feggins has always employed fewer than five employees.

3. Discussion

S.C. Code Ann. § 41-10-30 does not apply to employers employing fewer than five employees at all times during the preceding twelve months. § 41-10-20(2). Feggins had less than five employees during the preceding twelve months and thus is not within the requirements of § 41-10-30. If Feggins were covered by § 41-10-30, among other duties, she would be required to notify the employee in writing at the time of hiring of the normal hours, the wages agreed upon, and the place of payment. See § 41-10-30(A). In effect, § 41-10-30(A) establishes a required notice by the employer to the employee of the employer's intentions as to wages. By limiting the notice requirement to employers of five or more employees the General Assembly made a policy decision related to administrative convenience granted to small businesses.

To assist in the compliance with § 41-10-30, § 41-10-80(A) imposes a warning for the first violation of any provision of § 41-10-30 and a penalty for any subsequent violation. Further, to encourage the employers covered by § 41-10-30 to fulfill the intentions stated in the notice required by § 41-10-30(A), a penalty is imposed by § 41-10-80(B) through § 41-10-40(D) for every employer who does not in fact pay all wages due at the time and place designated as required by § 41-10-30.

It is axiomatic that if Feggins has no duty to give written notification pursuant to § 41-10-30(A), she cannot be penalized for failing to "pay wages due at the time and place designated as required by subsection (A) of § 41-10-30." In short, 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."

The primary rule of statutory construction is to ascertain and give effect to the legislature's intent or purpose as expressed in the statute. Green v. Thornton, 265 S.C. 436, 219 S.E.2d 827 (1975). Further the legislature's intent should be ascertained primarily from the plain language of the statute. 82 C.J.S. Statutes § 322(b) (1953). Unless the statute requires a different interpretation, the words used must be given their ordinary meaning. Hughes v. Edwards, 265 S.C. 529, 220 S.E.2d (1975). Finally, any statute that inflicts a penalty will be strictly construed against the state. Lund v. Gray Line Water Tours, Inc., 277 S.C. 447, 289 S.E.2d 404 (1982).

In the instant case, the Division charged Feggins with a violation of § 41-10-80(B) by asserting she failed to "pay all wages due at the time and place designated as required by subsection (A) of § 41-10-30." See § 41-10-40(D). I interpret § 41-10-40(D) as being applicable only 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 to make essential or necessary. The American Heritage College Dictionary 1105 (New College Edition 1979). Further, "require" is defined as to direct, order or command. Black's Law Dictionary 1304 (6th ed. 1990). Thus, the coverage of § 41-10-40(D) is only 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 the notice requirements of § 41-10-30 is nonetheless required to pay wages in accordance with a notice she was not required to issue. Further, to deviate from the plain language of the statute would give less than the required strict reading of the penalty provision of § 41-10-80(B). Since Feggins has less than five employees, she is not within the coverage of § 41-10-30, not in violation of § 41-10-40(D), and not liable for a penalty under § 41-10-80(B).

4. Conclusions of Law

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

1. For employers covered by § 41-10-30, the employer must notify the employee in writing at the time of hiring of the normal hours, the wages agreed upon, and the place of payment. S.C. Code Ann. § 41-10-30(A).

2. Employers covered by § 41-10-30 are directed to pay all wages due at the time and place designated "as required by subsection (A) of S.C. Code Ann. § 41-10-30." S.C. Code Ann. § 41-10-40(D).

3. A penalty of up to one hundred dollars may be imposed upon covered employers who violate the provisions of S.C. Code Ann. § 41-10-40. S.C. Code Ann. § 41-10-80(B).

4. Employers are not covered by S.C. Code Ann. § 41-10-30 if the employers employed fewer than five employees at all times during the preceding twelve months. S.C. Code Ann. § 41-10-20(2).

5. Only those employers within the coverage of S.C. Code Ann. § 41-10-30 are subject to the requirements of S.C. Code Ann. § 41-10-40(D) and the penalty of S.C. Code Ann. § 41-10-80(B).

6. Feggins employed fewer than five employees at all times during the preceding twelve months and as a matter of law is not liable for any penalties under S.C. Code Ann. § 41-10-80(B).

B. Computation Of Wages Due

1. Positions of Parties:

The Division asserts Feggins as an employer failed to pay Thomas, an employee, the full amount of pay due her on the paydays of March 16, March 24, April 7, and April 14, 1995 and that such payments were required on these paydays by S.C. Code Ann. § 41-10-40(D). Feggins asserts Thomas was not an employee of Feggins on March 16, March 24, April 7, and April 14, 1995. Feggins also asserts any wages due Thomas were properly withheld under S.C. Code Ann. § 41-10-40(C) and that section constitutes a proper basis for not paying Thomas. Finally, Feggins asserts she paid Thomas the undisputed amount of wages and retained the rest as authorized by S.C. Code Ann. § 41-10-60.

2. Findings of Fact:

1. Thomas earned wages while employed by Feggins Tax & Business Service from January 10 to March 11, 1995.

2. From January 10 to January 21, Thomas' rate of pay was $4.35 per hour.

3. After January 22, Thomas' rate of pay was $6.75 per hour.

4. Feggins set paydays on Friday but employees were notified at the time of hiring that pay checks would be some time period after the end of the work week.

5. Feggins set pay days as being five weeks after the end of the work week.

6. Thomas' work weeks, hours of work, rate of pay, wages earned, payments from Feggins, actual pay day, set pay day, and wages due on the set pay day are established as set out below: