ORDERS:
ORDER AND DECISION
STATEMENT OF THE CASE
This matter is before this tribunal for a contested case hearing pursuant to S.C. Code Ann. §
41-10-80(D) (Supp. 1996) and S.C. Code Ann. §§ 1-23-310, et seq. (Supp. 1996). The South Carolina
Department of Labor Licensing and Regulation (Department) contends that the Respondent David
Ard's Sanitation, Inc., (Ard's Sanitation) improperly withheld or diverted money from the wages of
one of its employees in violation of S.C. Code Ann. § 41-10-40(C) (Supp. 1996). The Department
seeks a $375 fine against Ard's Sanitation.
The hearing on this matter was held on October 10, 1997. The issues before this tribunal are
(1) whether the Respondent violated S.C. Code Ann. § 41-10-40(C) (Supp. 1996) and, (2) if so, what
is the proper penalty for such violation. Based upon the following Findings of Fact and Conclusions
of Law, this tribunal concludes that the Respondent violated S.C. Code Ann. § 41-10-40(C) (Supp.
1996) by improperly withholding funds from the wages of Frank Lorick. Consequently, the
Department shall impose a fine of $75.
FINDINGS OF FACT
Having carefully considered all testimony and arguments presented at the hearing of this
matter, and taking into account the credibility and accuracy of the evidence, I make the following
Findings of Fact by a preponderance of the evidence:
1. Ard's Sanitation is a garbage collection "service" company located at 124 Robin Forest
Drive, West Columbia, South Carolina. The company is owned by David and Mary Ard, and has
twelve employees.
2. Frank Lorick was an employee of Ard's Sanitation for approximately seven weeks,
beginning in April of 1997 and ending in May of 1997.
3. Ard's Sanitation paid its employees every week.
4. Ard's Sanitation had a policy of making loans during the week to its employees as
requested and approved by supervisors, and then deducting the sum of such loans from the net pay of
the employee's next paycheck. Prior to the issuance of the citation which is the subject of this case,
Ard's Sanitation made oral agreements with its employees that any loans would be deducted from the
employee's next paycheck.
5. Ard's Sanitation asserts that it made loans to Frank Lorick during five pay periods.
Frank Lorick denies receiving such loans.
6. Ard's Sanitation loaned Frank Lorick money during the work weeks preceding the
paydays of May 1, May 9, May 16, May 23, and May 30, 1997. Ard's Sanitation does not have
documentation that such loans were made. However, several witnesses testified to this fact. This
tribunal finds the testimony offered by these witnesses to be more credible than that of Frank Lorick.
7. Ard's Sanitation withheld money from the wages of Frank Lorick for federal and state
taxes, FICA, and Medicare. On the five paydays listed above, Ard's Sanitation also withheld a total
of $110 from the wages of Frank Lorick for loans made by Ard's Sanitation to him.
8. Ard's Sanitation did not provide Frank Lorick with written notification that deductions
for loans would be made from his wages.
9. Frank Lorick filed a complaint concerning the deductions from his wages with the
South Carolina Department of Labor Licensing and Regulation - Division of Labor on May 29, 1997.
10. Subsequent to the issuance of the citation which is the subject of this case, Ard's
Sanitation drafted a "Loan Receipt" form which it requires employees to sign before receiving loans.
This form indicates the amount of the loan given to the employee, and includes a statement that the
employee agrees to have the amount of the loan deducted from his next paycheck.
11. The Department seeks a $375 penalty against Ard's Sanitation.
CONCLUSIONS OF LAW AND ANALYSIS
A. Jurisdiction
1. Pursuant to S.C. Code Ann. § 1-23-310, et seq., (Supp. 1996) and S.C. Code Ann. §
41-10-80(D), the Administrative Law Judge Division has jurisdiction to hear this matter.
2. Chapter 10, Title 41, is applicable to all employers in South Carolina except that § 41-10-30 does not apply to employers of domestic labor in private homes and employers employing fewer
than five employees at all times during the preceding twelve months. S.C. Code Ann. § 41-10-20
(Supp. 1996).
B. Burden of Proof
3. In civil cases, generally, the burden of proof rests upon the party who asserts the
affirmative of an issue. 29 Am. Jur. 2d Evidence § 127 (1994); Alex Sanders, et al., South Carolina
Trial Handbook § 9:3 Party With Burden, Civil Cases (1994). The Department is the party asserting
the affirmative in this case; therefore, the Department must prove by a preponderance of the evidence
that Respondent improperly withheld or diverted money from the wages of Frank Lorick in violation
of S.C. Code Ann. § 41-10-40(C) (Supp. 1996). The preponderance of the evidence "is evidence
which is of the greater weight or more convincing than the evidence which is offered in opposition to
it . . .." Black's Law Dictionary 1182 (6th ed. 1990). "The preponderance of the evidence means such
evidence as, when considered and compared with that opposed to it, has more convincing force and
produces in the mind the belief that what is sought to be proved is more likely true than not true."
Sanders, supra, § 9:5 Quantum of Evidence in Civil Cases (1994), (citing Frazier v. Frazier, 228 S.C.
149, 89 S.E.2d 225 (1955)).
4. The weight and credibility assigned to evidence presented at the hearing of a matter is
within the province of the trier of fact. See South Carolina Cable Television Ass'n v. Southern Bell
Tel. and Tel. Co., 308 S.C. 216, 417 S.E.2d 586 (1992). Furthermore, a trial judge, who observes a
witness, is in the better position to judge the witness's demeanor and veracity and evaluate their
testimony. See Mann v. Walker, 285 S.C. 194, 328 S.E.2d 659 (Ct. App. 1985); Marshall v. Marshall,
282 S.C. 534, 320 S.E.2d 44 (Ct. App. 1984); McAlister v. Patterson, 278 S.C. 481, 299 S.E.2d 322
(1982); Peay v. Peay, 260 S.C. 108, 194 S.E.2d 392 (1973).
5. Wages are afforded a special "protected" status under the law. The South Carolina
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) (referring to Mullins v. Venable, 297 S.E.2d 866, 871 (W. Va. 1982) ("[P]ublic
policy requires employers to pay the wages of working people who labor on their employer's behalf.
Wages have traditionally been afforded special protection under the law, in recognition of the fact that
working people depend on wages to furnish the basic necessities of life to themselves an their
families.")).
6. Petitioner alleges that Respondent improperly withheld money from the wages of Frank
Lorick without providing him written notification of the deductions prior to making such deductions,
and thus, violated S.C. Code Ann. § 41-10-40(C) (Supp. 1996). This section provides:
An employer shall not withhold or divert any portion of an employee's wages unless
the employer is required or permitted to do so by state or federal law or the employer
has given written notification to the employee of the amount and terms of deductions
as required by subsection (A) of § 41-10-30. (emphasis added).
Deductions from an employee's wages other than those allowed by 41-10-40(C) are improper
without written notification. See Bennett v. Lambroukos, 303 S.C. 481, 401 S.E.2d 428 (Ct. App.
1991) (deductions from the wages of a dishwasher for broken dishes were improper because employer
did not give employee written notification at the time and place of hiring that such deductions would
be made).
7. No provision of federal or state law requires an employer to withhold loans made to
an employee or permits an employer to withhold such loans without the required seven days written
notification.
8. There is sufficient evidence to establish that Ard's Sanitation withheld money from the
wages of Frank Lorick without seven days written notification of such deductions in violation of S.C.
Code Ann. § 41-10-40(C) (Supp. 1996). This tribunal finds the testimony of the witnesses who
attested that Ard's Sanitation did in fact make loans to Frank Lorick persuasive. Further, this tribunal
finds nothing before it that would call into question the integrity of David and Mary Ard. Nonetheless,
Ard's Sanitation is not excused from the duty imposed by the statute to provide seven days written
notification of deductions from wages.
Under § 41-10-30(A), an employer must set forth in writing, at the time of hiring, any
deductions that will be made from wages. The employer has the option of posting the terms
conspicuously at or near the workplace. Further, any changes to these terms must be made in writing
at least seven days prior to becoming effective. S.C. Code Ann. § 41-10-30(A) (Supp. 1996).
9. Respondent Ard's Sanitation withheld money from the wages of Frank Lorick and has
failed to meet the requirements of S.C. Code Ann. § 41-10-40(C) (Supp. 1996). Consequently, Ard's
Sanitation is subject to a fine.
C. Penalty
10. Section 41-10-80(B) provides that any employer who violates § 41-10-40(C) is subject
to a fine of not more than one hundred dollars for each violation. S.C. Code Ann. § 41-10-80(B)
(Supp. 1996). Each improper deduction from an employee's wages constitutes a separate violation.
Therefore, each of the five paydays that Ard's Sanitation deducted money from Frank Lorick's wages
constituted a separate violation and as such, each is subject to a penalty.
11. It is a generally recognized principle of administrative law that the fact-finder has the
authority to impose an administrative penalty after the parties have had an opportunity to have a
hearing and be heard on the issues. Walker v. South Carolina ABC Comm'n, 305 S.C. 209, 407
S.E.2d 633 (1991). See also Ohio Real Estate Comm'n v. Aqua Sun Inv., 655 N.E.2d 266 (Ohio
1995); Shadow Lake of Noel, Inc. v. Supervisor of Liquor Control, 893 S.W.2d 835 (Mo. Ct. App.
1995); Matter of Henry Youth Hockey Ass'n, 511 N.W.2d 452 (Minn. Ct. App. 1994); Vermont
Agency of Natural Resources v. Duranleau, 617 A.2d 143 (Vt. 1992); City of Louisville v. Milligan,
798 S.W.2d 454 (Ky. 1990); State Police v. Cantina Gloria's, 639 A.2d 14 (Pa. 1994).
An administrative law judge, as the fact-finder, must determine an appropriate penalty based
on the facts presented at the contested case hearing. Parties are entitled to present evidence on all
issues arising out of the contested agency action. Additionally, the tribunal responsible for conducting
the contested case proceeding has the authority to decide the issues based on the facts presented, and
make the final decision on all the issues, including the appropriate penalty.
ORDER
Based on the foregoing Findings of Fact and Conclusions of Law, IT IS HEREBY
ORDERED that the Department shall impose a total fine of $75 against Respondent David Ard's
Sanitation for the violations of § 41-10-40(C).
AND IT IS SO ORDERED.
______________________________
JOHN D. GEATHERS
Administrative Law Judge
Post Office Box 11667
Columbia, South Carolina 29211-1667
November 26, 1997
Columbia, South Carolina |