Payroll South Carolina, Unique Aspects of South Carolina Payroll Law and Practice
This article is an introduction to the unique aspects of South Carolina payroll law and practices. It offers a brief overview of the state's current laws concerning when employers can terminate employees, as well as related legal requirements that may impact business decisions within the state. It also provides readers with practical advice on when they should consider recreating or relocating their presence in order to avoid violations of these laws.
A few things you will learn about South Carolina:
Myriad tax exemptions and deductions may exist for businesses within the state, including one for electricity used in cold storage facilities that only applies to firms with revenues over $4 million.
It is also a state that is known for its reliance on its technology base, with numerous business software companies located in the state.
The state is also known as the "Gun State," due to its high number of gun manufacturers and dealers providing employment to thousands throughout the state.
South Carolina has an unemployment rate of 5.3% as of October 2015, down from 6.2% in September 2015 and 6.5% in July 2014.
The U.S. Bureau of Labor Statistics' 2015 "Employment Projections" report showed that South Carolina unemployment was expected to rise from 5.1% in 2014 to 5.8% in 2015, then fall to 5.6% by 2020.
In 2014, the average annual wage for the state was $47,510 according to the U.S. Bureau of Labor Statistics
As of October 2015, a total of 1,146 companies had locations in South Carolina with 434 having more than 100 employees each according to Compustat Corporation's "Corporate Relocation Database.
It is likely that many of these companies, especially the larger ones, will look to expand operations or relocate within the state or move out of state as their staffing requirements warrant.
As a result, human resource professionals responsible for payroll management will need to be aware of South Carolina's payroll practices in order to help their organizations avoid unnecessary legal exposure.
The following provides a brief overview of South Carolina's most significant payroll laws and practices.
This article is not intended to cover all aspects of South Carolina law, but rather those which are most relevant to businesses operating in the state.
The following provides a brief overview of South Carolina's current laws governing employment termination.
The South Carolina Fair Employment Practices Act ( "codified" Title 54 ) prohibits employers from discriminating in employment against an employee based upon those categories of protected characteristics specified by the act. Protected categories include race, color, religion, sex (including pregnancy), national origin and ancestry, age (40 or older), disability, marital status, genetic information, arrest or conviction record and corporate affiliation.
In addition to the above statutes, many employers in South Carolina are also subject to federal laws which have similar provisions. In 2014 the U.S. Equal Employment Opportunity Commission ( "EEOC") issued an opinion letter explaining that Title VII's prohibition on employment discrimination based on sex, race, color, national origin or religion applies to South Carolina employers.
The following provides a brief overview of South Carolina's current laws governing wage payment and payment delays .
South Carolina law requires employers to make all wages and compensation payable by the employer to their employees in full and on time within two (2) bank days of the date when such wages or compensation are earned. South Carolina law also states that if a final paycheck is delayed for any reason, then the employer must pay one-half of the amount owed as compensation for each day it remains undelivered.
The following are the examples of South Carolina payroll law pitfalls that employers may encounter.
First, some South Carolina employers may have unknowingly violated these laws by failing to make payments on an employee's final paycheck in a timely manner, depending on when the employer learned that the employee was resigning. This could give rise to liability for wage or hour violations if the employer failed to pay all amounts owed in full and on time since it took an unreasonably long period of time for payment to be made.
Secondly, if an employee is terminated for cause by the employer without first waiting six months after their employment ends, then the employee must be paid one full month's wages at termination (minus policy deductions).
Third, if an employee is terminated for cause or a violation of company policy, the employer is not required to pay the employee's unused vacation.
The following provides a brief overview of South Carolina's current laws governing employees' final paychecks .
It is also important to consider that South Carolina law requires that if an employer terminates an employee without first providing them with their final full paycheck, then the employer must pay interest on that amount at the rates specified by law. This obligation applies whether or not the employer has a practice and policy of paying employees interest on compensation withheld in such situations.
South Carolina businesses are required to pay their employees all of the compensation which they earn on a fixed and regular basis. Unpaid wages are subject to an employee's claim for payroll violations in court, and can also be reported to various state agencies as well. Payroll service companies also have a duty to report such violations, in order to comply with South Carolina law, but they are not liable for any unpaid or delayed wages unless they had actual knowledge of the violation.
Under the South Carolina Wage Payment and Collection Law, as amended by the Employee Payroll Protection Act ( "codified" Title 31 ), an employer is required to make all wages and compensation which it pays to an employee in full or on time within two (2) banking days after such employee's wages have been earned, and all compensation, including commissions, must be paid on a regular basis at least once each week. In addition to the above requirements, failure of an employer to pay any wages due in a timely manner can be considered a violation in court.
As a result, employment termination practices and final paychecks must be carefully reviewed to ensure compliance with all applicable laws and regulations.
Further, the rights of employees to file claims for unpaid wages may have a significant negative impact on an employer's ability to hire quality workers and attract new business.
If an employer fails to abide by the law and pay wages due in a timely manner, then that employer can be subject to heavy fines, court costs, penalties and attorney fees in addition to owing the employee their back pay. The failure of an employer to pay wages due in a timely manner also makes it more difficult for that employer to acquire new clients or customers who will trust them with their funds until they are paid.
Conclusion
South Carolina law is clear that employers must pay employees all of the wages and compensation they earn on a fixed and regular basis, as well as on time. In addition to the requirements of South Carolina law, federal law requires the payment of wages in many situations. Furthermore, South Carolina employees have certain rights which can be used to enforce their pay, including the right to file claims for unpaid wages through a state agency or court.
These laws are designed to protect both employees and employers from unscrupulous employers who might try to avoid their liability for unpaid wages while operating a business out of state.
Employers should also note that these laws also apply when an employee accepts employment with an out-of-state employer.