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2005-UP-115 - Toner v. SC Emplotment Commission


In The Court of Appeals

Michael Toner,        Appellant,


South Carolina Employment Security Commission,        Respondent.

Appeal From Richland County
Alison Renee Lee, Circuit Court Judge

Unpublished Opinion No. 2005-UP-115
Submitted January 1, 2005 – Filed February 15, 2005


Everett Hope Garner, of Columbia, for Appellant.

Harold W. Funderburk, Jr., of Columbia, for Respondent.

PER CURIAM:  Michael Toner appeals the decision of the circuit court, affirming the Employment Security Commission’s finding that workers’ compensation benefits are excluded from the definition of wages for purposes of calculating unemployment benefits.  We affirm.


As a result of an on–the-job injury, Michael Toner received temporary total workers’ compensation payments from November 9, 2000 to May 15, 2002.  During this same time period, Toner was laid-off from work because of a lack of work. He sought unemployment benefits for the period in question.   To determine the amount of his unemployment benefits, the South Carolina Employment Security Commission considered the holidays and vacation days for which Toner was paid and which the employer reported to the Commission as wages. However, the Commission determined the workers’ compensation payments should not be included in determining the amount of Toner’s unemployment benefits, because they are not included in the definition of wages.  Section 41-27-380 of the South Carolina Code (1986) defines wages for tax and benefit computations under the South Carolina Employment Security Law as follows:

(1) “Wages” means all remuneration paid for personal services, including commissions and bonuses, any sums paid to an employee by an employer . . ..”Wages” does not include:

(a) The amount of any payment with respect to services performed in behalf of an individual in its employ under a plan or system established by an employing unit which makes provision for individuals in its employ generally or for a class or classes of individuals (including any amount paid by an employing unit for insurance or annuities or into a fund to provide for any such payment), on account of (i) retirement, (ii) sickness or accident disability, (iii) medical and hospitalization expenses in connection with sickness or accident disability, or (iv) death . . . .

Toner appealed to the circuit court, which agreed with the Commission, finding workers’ compensation payments are not wages for purposes of calculating Toner’s unemployment benefits.  Toner now appeals the circuit court’s order. 


In an action at law, tried without a jury, our standard of review extends only to the correction of errors of law.  Okatie River, L.L.C. v. Southeastern Site Prep, L.L.C., 353 S.C. 327, 334, 577 S.E.2d 468, 472 (Ct. App. 2003) (citations omitted).  The circuit court’s findings will not be disturbed on appeal unless they are wholly unsupported by the evidence or controlled by an erroneous conception of the application of the law.  Gordon v. Colonial Ins. Co. of California, 342 S.C. 152, 155, 536 S.E.2d 376, 378 (Ct. App. 2000) (citation omitted).

Likewise, when reviewing the decision of an administrative agency, our scope of review is limited, and we will neither overturn the agency’s findings of fact if they are supported by substantial evidence, nor will we disturb the agency’s rulings on questions of law if they are sound as a matter of law.  Alton Newton Evangelistic Ass’n, Inc. v. South Carolina Employment Sec. Comm’n, 284 S.C. 302, 304, 326 S.E.2d 165, 166 (Ct. App. 1985) (citations omitted).


Toner argues that because worker’s compensation is not specifically excluded from the definition of wages and because the Employment Security Law is “remedial social legislation,” worker’s compensation should be included when calculating unemployment benefits.  We disagree.

“The cardinal rule of statutory construction is to ascertain and effectuate the intent of the legislature.”  Charleston County Sch. Dist. v. State Budget and Control Bd., 313 S.C. 1, 5, 437 S.E.2d 6, 8 (1993) (citing Bankers Trust of South Carolina v. Bruce, 275 S.C. 35, 37, 267 S.E.2d 424, 425 (1980)).  The best evidence of the legislative intent is in the text of the statute.  Hodges v. Rainey, 341 S.C. 79, 85, 533 S.E.2d 578, 581 (2000) (citation omitted).  We cannot construe a statue without regard to its plain and ordinary meaning, and we cannot “resort to subtle or forced construction in an attempt to limit or expand a statute’s scope.”  Pascal v. State Election Comm’n, 317 S.C. 434, 437, 454 S.E.2d 890, 892 (1995) (citation omitted).  Further, if statutes deal with the same subject matter, we must reconcile them, “if possible, so as to render both operative.”  Hodges, 341 S.C. at 88, 533 S.E.2d at 583 (citing Butler v. Unisun Ins., 323 S.C. 402, 408, 475 S.E.2d 758, 761 (1996)).

Section 41-27-380 of the South Carolina Code (1986) provides the definition of wages for computing benefits under our South Carolina Employment Security Law.  Workers’ compensation is neither expressly included in nor expressly excluded from the definition of wages.  See S.C. Code § 41-27-380 (1986).

However, we are convinced that workers’ compensation benefits are payments to employees under employers’ plans for a class of individuals because of sickness or accident disability or expenses in connection therewith and are implicitly excluded from the statute’s definition of wages.  Toner’s argument that workers’ compensation is not excluded from the definition of wages turns on the notion that the workers’ compensation system is a creature of statute—not one of an employing unit.  Under the laws governing workers’ compensation, employers may opt out of the program if they prove they have the ability to pay similar benefits or show they are self-insured.  See S.C. Code Ann. § 42-5-10 (1976); S.C. Code Ann. § 42-5-20 (Supp. 2004).  In other words, employers may participate in the workers’ compensation plan or provide some other means of covering workers.  Such a system of payments is the very type intended to be excluded by the Legislature from the calculation of unemployment benefits. This holding is consistent with the way other courts have decided this issue. See Molnar v. Adm’r, Unemployment Comp. Act  685 A.2d 1157, 1162 (Conn. Super. Ct. 1995), aff’d, 685 A.2d 1107 (Conn. 1996) (finding reasonable the board of review’s decision that worker’s compensation payments did not constitute qualifying “wages” for purposes of calculating unemployment compensation benefits under Connecticut law); Lavin v. Alton Box Bd. Co., 431 So.2d 202, 203 (Fla. Dist. Ct. App. 1983) (noting that temporary total disability benefits are not wages to be used in computing worker’s average weekly wage); Swackhammer v. Unemployment Comp. Bd. of Review, 484 A.2d 851, 853 (Pa. Commw. Ct. 1984) (finding that wages as used in Pennsylvania unemployment compensation law did not include worker’s compensation benefits since they are awarded on account of job related disabilities and not in consideration of personal services).

Toner also argues that inasmuch as vacation and holiday pay were included in his wages and reported by the employer to the commission, the definition of wages should be expanded in this case to include worker’s compensation  payments. We disagree. Vacation and holiday pay were part of his compensation set by the terms of Toner’s hiring agreement and are necessarily included in the wages on which the employer is taxed for Employment Security purposes. See State by Bassett v. Hatcher, 131 S.E.2d 172, 175 (W. Va. 1963); accord Carter v. Bd. of Review Under Oklahoma Employment Sec. Act, 323 P.2d 362 (Okla. 1958).

Finally, Toner argues that because our Employment Security Law is remedial social legislation, it should be liberally construed to include worker’s compensation as wages. In Alton Newton, we held “[a]s social legislation, the Employment Security Law should be construed to provide protection to as many employees as possible.”  284 S.C. at 305, 326 S.E.2d at 167 (citations omitted). Nevertheless, Toner has the burden to show he meets the eligibility requirements of the statute. Hyman v. South Carolina Employment Sec. Comm’n, 234 S.C. 369, 373, 108 S.E.2d 554, 556 (1959).   Considering our scope of review, the purpose of the Employment Security Law, and the language of the statute, we conclude the circuit court was correct in holding workers’ compensation benefits are excluded from the definition of wages.


Because we conclude workers’ compensation benefits are not wages for the purpose of calculating unemployment benefits, we are constrained to affirm the order of the circuit court. If there is an element of unfairness in this decision, any remediation of such a result rests in the hands of the Legislature.


STILWELL, J., SHORT, J. and CURETON, A.J., concur.