Unemployment Insurance Law Summaries
South Carolina, Unemployment Insurance Law Summaries
South Carolina's unemployment insurance law is located in the Code of Laws of South Carolina, 1976, Title 41, Chapters 27 through 42, as amended, Secs. 41-27-10 to 41-42-40. The full text of the law is available at Unemployment Insurance Reports UI-SC ¶4001 . The full text of the Rules and Regulations Pursuant to the South Carolina Employment Security Law, Rules 47-1 to 47-29, is located in Unemployment Insurance Reports at UI-SC ¶5201 .
DEFINITIONS
“Employer” means one who pays $1,500 or more in any calendar quarter in either the current or preceding calendar year; employment of at least one individual for some portion of a day in each of 20 different calendar weeks in either the current or preceding year. Note that Native American tribes are also considered to be employers.
“Employment” means service performed for wages under a contract of hire, written or oral, express or implied, including service in interstate commerce, by an officer of a corporation, or an individual who, under the usual common law rules for determining the employer-employee relationship, has the status of an employee. Services by certain agent-drivers or commission-drivers, and certain traveling or city salespersons are covered. Service by an officer or member of the crew of an American vessel is covered if management and control of that vessel is within the state. Services performed for Native American tribes is considered employment under the South Carolina law.
Exclusions from employment are listed below.
“Wages” means all remuneration paid for personal services, including commissions, bonuses, NLRB and private back pay awards, cash value of all remuneration paid in any medium other than cash, and all tip income that is received by an individual while performing services that constitute employment and are included in a written statement to the employer, but not:
Remuneration over $7,000 paid by employer to an individual during any calendar year with respect to employment. Wages for services in another state and wages paid by employer's predecessor may be included in first $7,000. Amount will be increased if federal taxable wage is increased to an amount over South Carolina limit, and thus became $7,000.
Other exceptions from wages are listed below.
COVERAGE
Service performed for wages under a contract of hire, written or oral, express or implied, including service in interstate commerce, by an officer of a corporation, or an individual who, under the usual common law rules for determining the employer-employee relationship, has the status of an employee. Services by certain agent-drivers or commission-drivers, and certain traveling or city salesmen are covered. Service by an officer or member of the crew of an American vessel is covered if management and control of that vessel is within the state.
Exclusions from coverage are listed below.
Agricultural and domestic employers.- Agricultural labor is covered if performed for an employer who employed 10 or more workers in such labor in 20 different weeks in the current or preceding calendar year or paid cash remuneration of $20,000 or more for such service in any quarter of the current or preceding calendar year. When agricultural labor is supplied by a crew leader, the employing unit for which the services are performed is the employer of the crew members unless the crew leader is registered under the Farm Labor Contractor Registration Act of 1963, or substantially all of the crew members operate or maintain mechanized equipment that is provided by the crew leader. In either of these instances, the crew leader is the employer. Services performed prior to 1/1/80 by aliens is excluded.
Domestic service.- Domestic service by an individual in the operation and maintenance of a private household, local college club or local chapter of a college fraternity or sorority (as distinguished from service as an employee in the pursuit of an employer's trade, occupation, profession, enterprise or vocation) is covered if performed for an employing unit that paid wages of $1,000 or more for such service in any quarter of the current or preceding calendar year.
Government and nonprofit employers.- Coverage is mandatory for services performed for tax-exempt nonprofit organizations which employ four or more individuals in each of 20 different weeks within either the current or preceding calendar year. Most services for the state and its political subdivisions are covered. Services performed for Native American tribes is also covered. Nonprofit organizations and Native American tribes may elect to finance the payment of benefits by paying contributions or making payments in lieu of contributions. Covered state governmental entities may pay contributions or make payments in lieu of contributions. Employers using reimbursement financing may
make payments equal to the full amount of regular plus 50% (100% for governmental entities) of extended benefits paid to claimants, or
quarterly payments of 2% of taxable payroll.
Under (2), employers are subject to an adjustment to reflect actual benefit costs.
Nonprofit organizations using the reimbursement method may be required to post a surety bond or to deposit money or securities. Nonprofit organization that terminates reimbursement financing pays at rate of 2.7% until there have been 24 consecutive calendar months of coverage after becoming liable for contributions.
EXCEPTIONS
Wages.- The term “wages” does not include:
Remuneration over $7,000 paid by employer to an individual during any calendar year with respect to employment. Wages for services in another state and wages paid by employer's predecessor may be included in first $7,000. Amount will be increased if federal taxable wage is increased to an amount over South Carolina limit, and thus became $7,000.
Payments to, or on behalf of, employees under plan or system established on account of retirement, sickness or accident disability, medical and hospitalization expenses in connection with sickness or accident disability, or death.
Any payment (other than vacation or sick pay) made to an employee after the month in which he or she attains age 65, if he or she did not work for the employer in the period for which payment is made.
Payment of employees' FICA tax without deduction from wages, only if employees' services were in agricultural labor or domestic service in a private home of the employer.
Military reserve pay.
Employment.- The term “employment” does not include the following:
Agricultural labor performed by students who are enrolled and regularly attending classes for at least five months during a year at a secondary school or accredited college, university or technical school or by part-time persons who are not students but who at the conclusion of their agricultural labor would not qualify for benefits.
Service not in the course of employing unit's trade or business.
Family employment, i.e., service performed in employ of son, daughter, or spouse, and by child under 18 in employ of parent.
Insurance agents or solicitors solely on commission basis.
Interns and student nurses.
Newspaper and shopping news carriers under 18.
Organizations exempt from income tax with respect to service performed in calendar quarter if remuneration is less than $50.
Real estate salespersons or agents, other than those employed by a nonprofit organization, paid solely on a commission basis.
Seafood industry, i.e., persons employed in the commercial netting, catching and gathering of seafood and the processing of such seafood for the fresh market.
Service covered by federal unemployment compensation system.
Service for a school, college or university by a student in regular attendance, or by a spouse of a student if the spouse's employment is under a program of assistance to the student.
Service by a student under 22 enrolled at a nonprofit or public educational institution in a full-time work study program. This exemption does not apply to a program established for an employer or group of employers.
Service for a hospital by a patient of the hospital.
Agricultural and domestic employers.- Services performed prior to 1/1/80 by aliens is excluded.
Government and nonprofit employers.- Coverage is mandatory for services performed for tax-exempt nonprofit organizations which employ four or more individuals in each of 20 different weeks within either the current or preceding calendar year. Most services for the state and its political subdivisions are covered. Services for a nonprofit organization or a government employer do not include the following:
Church, or organization operated primarily for religious purposes and which is controlled by a church.
Religious duties of a minister or member of a religious order.
Patients performing services in a rehabilitation facility or sheltered workshop.
Individual receiving unemployment work-relief or work-training under program financed by a federal agency or an agency of a state or political subdivision, unless a federal law, rule or regulation mandates unemployment insurance coverage to individuals in a particular work-relief or work-training program.
Inmate of custodial or penal institution.
Elected officials or their appointed successors.
Members of a legislative body or the judiciary.
Members of the State National Guard or Air National Guard.
Temporary employees serving in case of fire, storm, snow, earthquake, flood or similar emergency.
Individuals serving in certain major nontenured policymaking or advisory positions.
PROCEDURES
Base period.- First four of the last five completed calendar quarters preceding benefit year.
Benefit year.- One-year period beginning with day on which request for determination of status as insured worker is first filed.
Weekly benefit amount.- 50% of claimant's average weekly wage (determined by dividing total wages for insured work in high quarter of base period by 13) computed to next lower multiple of $1. Minimum is $20 and maximum is 50% of statewide average weekly wage. Maximum for benefit years beginning 7/1/2008 is $326. Amount of wages disregarded in computing partial benefit is
of the weekly benefit amount.
Maximum total benefits.- Lesser of either 26 times weekly benefit amount or
of total base-period earnings. In addition, during certain periods of high unemployment, payment of extended benefits at claimant's weekly benefit amount.
Benefit eligibility: Requirements.- Claimant is eligible if (Sec. 41-35-110):
able to work, available for work for which claimant is fitted by training or experience, and actively seeking suitable work at a locality where claimant earned wage credits or where claimant may reasonably be expected to find work (this requirement is not applicable to otherwise eligible individual in approved training);
unemployed for one-week waiting period;
wages of $540 in high quarter of base period, $900 during base period, and total base-period wages equaling 1
times high-quarter wages;
claimant participates in reemployment services if so required.
A claimant is ineligible for benefits unless, after the beginning of the preceding benefit year during which claimant received benefits, claimant earned in the employ of a single employer not less than eight times claimant's weekly benefit amount for the preceding benefit year.
A claimant is ineligible for up to two weeks in a benefit year for vacation, with or without pay, if there is a written contract, or by reason of the employer's vacation policy and practice to its employees, and if work will be available at the end of the vacation.
A claimant is ineligible if the unemployment is due to a vacation week with respect to which claimant is receiving or has received regular wages.
A claimant is not ineligible if claimant is separated, through no fault of the claimant, from claimant's most recent bona fide employer (work or employer from which claimant separated, regardless of any work subsequent to claimant's separation in which claimant earned less than eight times claimant's weekly benefit amount).
Self-employment may create ineligibility.
No benefits may be paid to instructors, researchers, or principal administrators, of an educational institution during school vacation periods or during paid sabbatical leaves based on service with such institutions.
Benefits are not payable based on services in a nonprofessional capacity performed for an educational institution during periods between school years or terms. Retroactive payments of benefits may be claimed if no opportunity to work is offered in the second year or term.
A similar disqualification applies to individuals performing services in an educational institution while in the employ of an educational service agency and to school employees during customary and established vacation periods and holiday recesses.
Benefits are not payable to professional athletes for periods between sport seasons if there is a reasonable assurance that the individual will perform services for both seasons.
Benefits are not payable to an alien unless the individual has been lawfully admitted for permanent residence or is otherwise permanently residing in the United States under color of law.
No individual is denied benefits for any week in which the individual is required by law to appear in court as a witness or to serve as a juror; however, any benefits received must be reduced by any per diem received for service as a juror.
Disqualifications-Period
Voluntary leaving without good cause-until claimant has earned eight times weekly benefit.
Discharge for cause connected with the work-six to 26 weeks, beginning with effective date of claim, with a corresponding and mandatory reduction in total benefits to be calculated by multiplying the claimant's weekly benefit amount by the number of weeks of disqualification.
Refusal of suitable work without good cause-week of occurrence and until the claimant has performed services in employment and earned wages of at least eight times weekly benefit amount. No disqualification if the individual refuses based on participation in approved training.
Labor dispute-duration of dispute.
Receipt of unemployment benefits under another law -weeks for which benefits received.
Knowingly accepting benefits to which not entitled-week in which claim filed and additional 10 to 52 weeks.
Voluntary retirement-until the individual has had new employment with earnings of at least eight times weekly benefit.
Receipt of governmental or other pension, retirement pay, annuity or other similar periodic payment based on previous employment -reduction of weekly benefit amount by amount of such payment, except that if the claimant has made contributions to the pension plan, claimant's benefits are reduced by
the pro-rated weekly amount of the pension after deduction of the portion directly attributable to the individual;
no part of the pension if the entire contribution was made by the individual or a non-base period employer; and
the entire pro-rated weekly amount of the pension if neither (1) nor (2) applies.
WHAT THE EMPLOYER MUST DO
Pay the standard rate.- 5.4%. Maximum possible rate is 6.8%. No employee tax.
Experience rates.- A new employer pays 2.64% (plus the 0.06% administrative contingency assessment for a total of 2.7% for 2007) until there have been 12 consecutive months of coverage after it first became liable for contributions. Reduced rate of newly eligible employer will be computed beginning as of first quarter after completion of 12-month period. Contribution rates are established as of June 30 each year to become effective the following January 1 in accordance with the reserve-ration system, which is the ratio the reserve balance bears to the most recent annual payroll. To arrive at the reserve balance, all benefits charged to an employer's account are subtracted from the total contributions it has made to the fund. The result is the employer's reserve.
Note that where there is an excess of contributions paid over benefit charges that is four percent of the employer's most recent annual payroll, the employer will pay at a less-than-2.64% base rate.
Where there is a deficit, i.e., an excess of benefits charged over contributions paid that is 5% or more of the employer's most recent annual payroll, the employer pays at a base rate higher than 2.64%.
All base rates of less than 2.64% are subject to increase if the “statewide reserve ratio” is less than 2%. If this ratio is 1.9% or more but less than 2%, base rates are increased by 0.1%; if 1.8% or more but less than 1.9%, base rates are increased by 0.2%; if 1.7% or more but less than 1.8%, base rates are increased by 0.3%; if 1.6% or more but less than 1.7%, base rates are increased by 0.4%; if 1.5% or more but less than 1.6%, base rates are increased by 0.5%; if 1.4% or more but less than 1.5%, base rates are increased by 0.6%; if less than 1.4%, base rates are increased by 0.7%.
The statewide reserve ratio for 2009 is 0.383%, therefore a rate increase of 0.7% is added to all contributory employers' base rates for calendar year 2009.
Each employer (other than employers required to pay the 5.4% rate, nonprofit organizations, and certain governmental employers who have elected to pay contributions) must pay an administrative contingency assessment equal to .06%. To offset the .06% assessment, all employer rates except the 5.4% rate are reduced by .06% for 1986 and subsequent years.
Rates for 2009 are determined under the rate schedule below. (not including the 0.06% administrative contingency assessment in effect for 2009):
% of excess
|
2009
Rate (%)
|
|---|
9% or more
|
1.24
|
8% or more but less than 9%
|
1.59
|
7% or more but less than 8%
|
1.94
|
6% or more but less than 7%
|
2.29
|
5% or more but less than 6%
|
2.64
|
4% or more but less than 5%
|
2.99
|
less than 4%
|
3.34
|
The following table of rates applies to negative-balance employers for 1986 and subsequent years (note that negative-balance employers, except for those paying the 5.4% rate, pay the .06% administrative contingency assessment, which is not included in the rates given below, but do not pay any other increases in rates):
% of deficit
|
Rate (%)
|
|---|
5% or more but less than 10%
|
3.69
|
10% or more but less than 15%
|
4.04
|
15% or more but less than 20%
|
4.39
|
20% or more but less than 25%
|
4.74
|
25% or more but less than 30%
|
5.09
|
30% or more but less than 35%
|
5.44
|
35% or more but less than 40%
|
5.79
|
40% or more
|
6.10
|
If on the computation date there is a delinquent account, a base rate of 2.64% must be assigned for the period to which the computation applies. If the base rate for the prior year or the computed base rate for the computation period is greater than 2.64%, the higher base rate must be assigned until the next computation date.
SUTA dumping.- An employing unit must be assigned all or a portion of the employment benefit record of an existing employing unit when there is an acquisition or change in the form or organization of an existing business enterprise, or a severable portion of that business, and there is a continuity of control of the business enterprise. The employing unit must be assigned the same rate as the predecessor, or the predecessor who has the highest base rate if there is more than one predecessor employing unit with different base rates.
“Control of the business enterprise” may occur by means of ownership of the organization conducting the business enterprise, ownership of assets necessary to conduct the business enterprise, security arrangements or lease arrangements covering assets necessary to conduct the business enterprise, including workers, or a contract when the ownership, stated arrangements, or contract provide for or allow direction of the internal affairs or conduct of the business enterprise.
“Continuity of control” exists if one or more persons, entities, or other organizations controlling the business enterprise remain in control of the business enterprise after an acquisition or change in form or there is a transfer to persons within the first degree of kinship to the transferors. Evidence of continuity of control includes, but is not limited to, changes of an individual proprietorship to a corporation, partnership, limited liability company, association, or estate; a partnership to an individual proprietorship, corporation, limited liability company, association, estate, or the addition, deletion, or change of partners; a limited liability company to an individual proprietorship, partnership, corporation, association, estate, or to another limited liability company; a corporation to an individual proprietorship, partnership, limited liability company, association, estate, or to another corporation or from any form to another form.
Note that an employing unit must not be assigned any portion of the employment benefit record of an existing employing unit upon the acquisition of that established business or of an identifiable and segregable part of it if: (1) the acquiring person was not otherwise an employer at the time of the acquisition; (2) the person has no substantial commonality of interest, including ownership or management, in the business acquired; and (3) the Commission finds that the person acquired the business or an identifiable and segregable part thereof solely or primarily for the purpose of obtaining a lower rate of contributions.
DEADLINES
Tax and wage.- Employer Quarterly Contribution and Wage Reports, Form UCE-101 and 120, are due quarterly, on or before last day of the following month. If due date falls on Sunday or legal holiday, reports may be filed on following day. Failure to file reports or the filing of incorrect or insufficient reports may cause employer to be liable for contributions at double the rate otherwise required. Failure to file wage or contribution report within 15 days of demand incurs upon employer a penalty equal to 10% of contribution amount due, but not less than $25 or more than $1,000. Employers with 100 or more employees must file their wage reports via magnetic media.
ENFORCEMENT
The South Carolina Employment Security Law is administered by the Employment Security Commission.
Penalties for violation of the Law are recoverable by the Commission in any court of competent jurisdiction.
The Commission and the state may be represented in Court in civil actions by any qualified attorney employed by the Commission or, at the Commission's request, by the Attorney General. Criminal actions are prosecuted by the Attorney General, or, at the request and under the direction of the Attorney General, by the solicitor of any circuit or any prosecuting attorney in any court of competent jurisdiction in the county in which the employer has a place of business or the violator resides.
The Commission may compromise any civil penalty or cause of action instead of commencing suit thereon and may compromise any such case after suit has been commenced.
WHO TO CONTACT
The South Carolina Employment Security Law is administered by the Employment Security Commission, 1550 Gadsden St., P.O. Box 995, Columbia, South Carolina 29201. Telephone (803) 737-2400.
RECORDKEEPING
Every employing unit is required to keep for five years true and accurate records, containing such information as is prescribed by the Commission. Such records must be kept open to inspection, and are subject to being copied by the Commission or its authorized representative.
Employing units are required to make such reports on forms prescribed and issued by the Commission as are necessary for the effective administration of the Act. Information thus acquired is confidential to the extent that this is compatible with proper administration of the Law.
POSTING
All employing units are required to post and maintain in conspicuous places such informational posters as the Commission provides. A notice of coverage is required to be posted by all employers subject to the law. See ¶42-9900 .
PENALTIES
Interest and penalties.- Contributions and reimbursement payments unpaid on the due date bear interest at the rate of 1% for each month or fraction thereof.
As soon as is practicable after a contribution report is filed, the Commission must examine it and compute the contribution due. If the amount so computed is more than the amount paid, the excess must be paid to the Commission within ten days after notice of the amount is mailed by the Commission. If the report was made in good faith, and the understatement was not deliberate, no penalty will be added because of the understatement, but the deficiency will bear interest at the rate of one percent for each month or fraction thereof. If the understatement was due to negligence, but there was no intent to defraud, there will be added to the amount of the deficiency, in addition to interest, 10% thereof. If the understatement was false or fraudulent, and made with intent to evade payment, there will be added to the amount of the deficiency, in addition to interest, 100% thereof.
If an employing unit fails to make reports as required, or fails to make proper reports, and refuses or neglects to file a proper report within 15 days after notification by the Commission, the Commission will, according to its best information and belief, determine the wages paid for employment during the period that was to have been covered by the report and compute the contributions due based on double the rate that would otherwise apply. The Commission in such case may allow further time, not to exceed 15 days, for the filing of the report. If an employer fails to file any report required of it with respect to wages or contributions within 15 days after notification by the Commission, the Commission will assess such employer a penalty of 10% of the contributions due, but no less than $25 and no more than $1,000, in addition to the contributions payable with respect to the delinquent report. The interest on contributions or reimbursement payments accrued prior to the establishment of an employer's liability is only one half of one percent per month until the date on which liability is established, and one percent per month thereafter.
If any employer's amount of contributions that is due and payable is unpaid ten days following the date on which an assessment or debit memorandum has been issued therefor, a penalty of 10% of the amount of contributions due, not to exceed $1,000, must be paid in addition to any other interest or penalty that is applicable.
The Commission may for good cause extend the time for filing reports and paying contributions. Any person to whom an extension is granted will pay, in addition to the contributions due, interest at the rate of 1% per month or fraction thereof from the due date of the contributions to the date of the payment.
If an amount of administrative contingency assessment that is due and payable is unpaid 10 days following the date on which an assessment or debit memorandum has been issued, a penalty of $10 may be assessed.
Employers who are delinquent in the payment of contributions with respect to any calendar year or portion thereof may, upon application, be authorized to pay the delinquent contributions, with interest on deferred amounts until actually paid, in consecutive installments of such amounts and over such periods and at such times as the Commission or the Executive Director may approve. The entire balance will, in such case, be immediately due if any installment is not timely paid.
A fraudulent statement or nondisclosure, or a willful violation of the terms of the law, or rule, or regulation will render an individual or employing unit liable to a fine, or imprisonment, or both.
The failure to do any act required by the law will be deemed to be an act committed in part at the office of the Commission in Columbia, South Carolina. The certificate of the Commission that there has been a default in reporting, payment, providing records, etc., will be prima facie evidence thereof.
Liens.- If an employer defaults in a contribution payment, administrative contingency assessment, or interest or penalty thereon, the Employment Security Commission will notify the employer of the amount due; if the amount is not paid within 10 days thereafter, the Commission will issue a warrant of execution directed to the sheriff or tax collector of the county commanding a levy upon, and sale of, the employer's real and personal property found within the county for the payment of the amount with interest and costs. Upon receipt of the execution, the sheriff or tax collector will file a copy with the Clerk of the Court in the county, and the Clerk will enter prescribed information in the abstract of judgments and will index the warrant upon the index of judgments. The sheriff or tax collector will thereupon proceed upon the warrant in the manner prescribed by law in respect to executions issued against property upon judgments of a court of record. Contributions, the administrative contingency assessment, interest, penalties, and costs will be deemed taxes owing to the State, and, after the aforementioned warrant is indexed, will constitute a lien upon the real property or chattels of the person by whom the contributions are due. The sheriff or tax collector may contract with a collection agency to collect delinquent amounts owed.
Contributions, administrative contingency assessments, interest, penalties, and costs due under the law will be deemed taxes owing to the State and when delinquent will constitute a lien upon the real property or chattels of an employer.
Bankruptcy.- Where an employer's assets are distributed by order of court under the South Carolina laws, including any receivership, assignment for benefit of creditors, adjudicated insolvency, composition, or similar proceeding, contributions then or thereafter due must be paid in full on the same basis as all other tax claims but on a parity with claims for wages of not more than $250, earned within six months of the commencement of the proceeding. In the case of an employer's adjudication in bankruptcy, judicially confirmed extension proposal, or composition, under the Federal Bankruptcy Act, contributions then or thereafter due shall be entitled to such priority as is provided in that Act.
<p>Bankruptcy.— Where an employer's assets are distributed by order of court under the South Carolina laws, including any receivership, assignment for benefit of c</p>
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