South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
SCDLLR vs. Berlin's

AGENCY:
South Carolina Department of Labor, Licensing and Regulation

PARTIES:
Petitioners:
South Carolina Department of Labor, Licensing and Regulation, Division of Labor

Respondents:
Berlin's
 
DOCKET NUMBER:
97-ALJ-11-0629-CC

APPEARANCES:
Petitioner, South Carolina Department of Labor, Licensing & Regulation, Division of Labor: Sharon A. Dantzler, Esq.

Respondent, Berlin's: Barry I. Baker, Esq.

Parties Present: Both Parties
 

ORDERS:

ORDER

I. Statement of the Case


The South Carolina Department of Labor, Licensing & Regulation, Division of Labor (Division of Labor) seeks an order enforcing a citation and a proposed penalty of $75. Berlin's opposes Division of Labor's position and asserts no violation occurred, and thus no fine is due. Berlin's disagreement with the Division of Labor's determination places jurisdiction in the Administrative Law Judge Division (ALJD). S.C. Code Ann. § 1-23-600(B) (Supp. 1997). The hearing in this matter was held February 9, 1998, at the Edgar Brown Building, Columbia, South Carolina. Based upon the evidence and the argument presented by the parties, the fine of $75 is imposed.





II. Issues

Did Berlin's fail to pay wages due an employee?



III. Analysis


1. Positions of Parties

The Division of Labor argues that an employee of Berlin's accrued wages in the form of vacation pay pursuant to Berlin's written vacation policy. The Division of Labor asserts that a violation of the law occurred when Berlin's failed to pay the wages owed. Berlin's argues no vacation pay was due. Rather, no wages remained unpaid since, prior to the employee leaving employment, the employee had taken all of the vacation due him.

2. Findings of Fact

Based on the preponderance of the evidence, the following findings of fact are entered:

  1. On August 22, 1997, a former employee of Berlin's filed a complaint with the Division of Labor asserting that Berlin's had not paid the employee for accrued vacation pay.
  2. The employee began employment with Berlin's in March of 1992.
  3. The employee maintained continuous employment at Berlin's and worked as a full time employee for Berlin's for the entire fiscal year of August 1, 1996 to July 31, 1997.
  4. The individual further continued his employment at Berlin's and was an employee of Berlin's at the beginning of the new fiscal year which started on August 1, 1997.
  5. The employee remained an employee of Berlin's until he resigned on August 8, 1997.
  6. The written policy of Berlin's is that each full-time employee is entitled to a one week paid vacation beginning on August 1 after completion of one full year of employment and to two weeks of paid vacation upon completion of two years of full-time employment.
  7. The employee made a demand for the vacation payment and the employer declined to pay the amount requested.


3. Discussion

A. Introduction

At the time of hiring an employee, employers such as Berlin's must provide to the employee a written notice of the normal hours, the place of payment, and the wages agreed upon. S.C. Code Ann. § 41-10-30(A) (Supp. 1997). Employers covered by S.C. Code Ann. § 41-10-30 (Supp. 1997) are directed to pay all wages due at the time and place designated "as required by subsection (A) of § 41-10-30 (Supp. 1997)." S.C. Code Ann. § 41-10-40(D) (Supp. 1997). In meeting the demand to pay wage payments at the time designated, the employer must pay the "wages" due as that term is defined by statute. The term "wages" includes vacation payments due to an employee under the employer's policy. S.C. Code Ann. § 41-10-10(2) (Supp. 1997).



B. Employer's Vacation Policy

The dispute here is that Berlin's did not pay an employee the wages due by failing to pay the employee for vacation pay earned under the company's written vacation policy. Berlin's denies any wrongdoing by arguing no vacation pay was due and thus no failure to pay wages occurred.

Berlin's written policy on vacation payments is as follows:

Each full-time employee is entitled to one (1) week's paid vacation beginning on August 1 after completion of one (1) full year of employment. After two (2) years completion of full-time employment, one is entitled to two (2) week's paid vacation.

In applying the vacation policy to the wage dispute here, the issue is whether the employee earned the vacation pay prior to the August 1 start of the new fiscal year. If so, the earned wages must be paid, and, if not, the wages are not due.

1. Earning Vacation Pay

Vacation pay is not a gratuity or a gift, but rather is tantamount to additional wages for services performed. S.C. Code Ann. § 41-10-10(2) (Supp. 1997). In the absence of an employer agreement to the contrary, for the purpose of calculating wages due under S.C. Code Ann. § 41-10-10(2), the written notice to an employee of a paid vacation creates a right to that payment which accrues in a proportionate manner as the labor is rendered, and once vested, must be paid on termination of the employment. See Suastez v Plastic Dress-Up Co. 647 P.2d 122 (Cal. 1982).

Here, the vacation policy explains that on August 1, the employee becomes "entitled" to two weeks of paid vacation if that employee has completed two years of full-time employment. Interpreting the meaning of the language granting the vacation pay requires ascertaining and giving effect to the intention of the parties based upon the plain language used. Friarsgate, Inc. v. First Federal Sav. and Loan Ass'n of South Carolina, 317 S.C. 452, 454 S.E.2d 901 (Ct. App. 1995). If the language is clear and unambiguous, the language alone determines the effect applied. United Dominion Realty Trust, Inc. v. Wal-Mart Stores, Inc., 307 S.C. 102, 413 S.E.2d 866 (Ct.App.1992).

The word "entitled" means to give one a legal right or claim to something. The American Heritage Dictionary, Entitled, p. 437 (1978). Thus, under the general application of the means for earning vacation pay, the Berlin's vacation policy holds that an individual who is an employee on the August 1 date and who has completed two years of employment, has earned two weeks of vacation pay.(1)



Here, the facts establish the employee who filed the complaint had completed over five years of employment. The employee worked as a full time employee for Berlin's for the entire fiscal year of August 1, 1996 to July 31, 1997. Further, the individual was an employee of Berlin's on August 1, 1997 since he did not resign until August 8, 1997. Under such facts, the employee became entitled to the vacation pay on August 1, 1997. The employee made a demand for the vacation payment and the employer declined to pay the amount requested. Accordingly, Berlin's failed to pay wages when due.

2. Penalty For Failure To Pay Vacation Wages

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 (Supp. 1997). S.C. Code Ann. § 41-10-80(B) (Supp. 1997). Here, Berlin's is in violation of the statute. The penalty of $75 is appropriate for the circumstances involved here.

4. Conclusions of Law

Based upon the above Findings of Fact, I conclude as a matter of law, the following:

1. At the time of hiring an employee, an employer such as Berlin's must provide to the employee a written notice of the normal hours, the place of payment, and the wages agreed upon. S.C. Code Ann. § 41-10-30(A) (Supp. 1997).

2. Employers covered by S.C. Code Ann. § 41-10-30 (Supp. 1997) 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 (Supp. 1997)." S.C. Code Ann. § 41-10-40(D) (Supp. 1997).

3. The term "wages" includes vacation payments due to an employee under the employer's policy. S.C. Code Ann. § 41-10-10(2) (Supp. 1997).

4. Vacation pay is not a gratuity or a gift, but rather is tantamount to additional wages for services performed. S.C. Code Ann. § 41-10-10(2) (Supp. 1997).

5. In the absence of an employer agreement to the contrary, for the purpose of calculating wages due under S.C. Code Ann. § 41-10-10(2), the written notice to an employee of a paid vacation creates a right to that payment which accrues in a proportionate manner as the labor is rendered, and once vested, must be paid on termination of the employment. See Suastez v. Plastic Dress-Up Co. 647 P.2d 122 (Cal. 1982).

6. The meaning of the language granting the vacation pay requires ascertaining and giving effect to the intention of the parties based upon the plain language used. Friarsgate, Inc. v. First Federal Sav. and Loan Ass'n of South Carolina, 317 S.C. 452, 454 S.E.2d 901 (Ct. App. 1995).

7. If the language is clear and unambiguous, the language alone determines the effect applied. United Dominion Realty Trust, Inc. v. Wal-Mart Stores, Inc., 307 S.C. 102, 413 S.E.2d 866 (Ct.App.1992).

8. On August 1, a Berlin's employee becomes "entitled" to two weeks of paid vacation if that employee has completed two years of full-time employment.

9. The plain and ordinary meaning of "entitled" is to give one a legal right or claim to something. The American Heritage Dictionary, Entitled, p. 437 (1978).

10. On August 1 of the new fiscal year, an employee of Berlin's who has completed two years of employment has accrued and earned and is entitled to two weeks of vacation pay as of the August 1 date.

11. Should the agreement drafted by Berlin's no longer meet the needs of the employer, Berlin's, upon proper and timely notice to the employees, is free to change the terms of the vacation pay policy. S.C. Code Ann. § 41-10-30 (Supp. 1997).

12. Berlin's failed to pay wages when due. S.C. Code Ann. § 41-10-40(D) (Supp. 1997).

13. Berlin's violated the provisions of S.C. Code Ann. § 41-10-40(Supp. 1997).

14. 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 (Supp. 1997). S.C. Code Ann. § 41-10-80(B) (Supp. 1997).

15. A penalty of $75 is imposed. S.C. Code Ann. § 41-10-80(B) (Supp. 1997).



IV. Order

Based upon the foregoing Findings of Fact and Conclusions of Law, LLR shall impose a fine of $75 for the violation of S.C. Code Ann. § 41-10-40 (D) (Supp. 1997).



AND IT IS SO ORDERED.

RAY N. STEVENS

Administrative Law Judge

Dated: February 13th, 1998

Columbia, South Carolina

1. Certainly, if the agreement imposed by Berlin's is no longer satisfactory, Berlin's, upon proper and timely notice to the employees, is free to change the terms of the vacation pay policy. S.C. Code Ann. § 41-10-30 (Supp. 1997).


Brown Bldg.

 

 

 

 

 

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