November 2, 2015.
[Copyrighted Material Omitted]
From The Administrative Law Court. Ralph King Anderson, III,
Administrative Law Judge. Appellate Case No. 2014-001199.
H. Westbrook, of Charleston, for Appellant.
Eric Summers, of Malone Thompson Summers & Ott, LLC, of
Columbia, for Respondent.
J. SHORT and MCDONALD, JJ., concur.
Appellant (Inmate), an inmate participating in a Prison
Industries service project operated by Respondent South
Carolina Department of Corrections (SCDC), challenges an
order of the South Carolina Administrative Law Court (ALC)
upholding SCDC's denial of Inmate's wage-related
grievance. Inmate argues the ALC erred in denying
his motion to supplement the record. Inmate also argues the
ALC erred in applying section 24-1-295 of the South Carolina
Code (Supp. 2015) to determine the deductions from his gross
wages. We affirm in part, reverse in part, and remand.
1995, our legislature enacted section 24-3-430 of the South
Carolina Code (2007) to authorize the expansion of the Prison
Industries program into the private sector. This expansion
allowed qualified private entities to use inmate labor but
required the wages for participating inmates to be no less
than " the prevailing wage for work of [a] similar
nature in the private sector." Act No. 7, 1995 S.C. Acts
78. Section 24-3-430 became effective on July 1, 1995.
Id. at 102. Subsequently, on September 30, 1998,
SCDC entered into a contract with Williams Technologies, Inc.
(WTI) for the employment of SCDC inmates on the premises of
Lieber Correctional Institution (Lieber) in WTI's
business of " disassembly and/or remanufacturing of its
product lines at [Lieber]." The cover page for the
contract document is entitled " Williams Technology
Transmissions Service Contract."
contract's " Scope of Work" provision states,
in pertinent part, " Prison Industry inmates under the
general oversight of SCDC will disassemble and/or
remanufacture [WTI's] product lines according to
engineering design and manufacturing specifications developed
and provided by [WTI] . . . ." The contract also
provides, " For all purposes, inmates shall be
considered to be employees of SCDC." With regard to
payment for services, the contract requires WTI to pay SCDC
" $4.00 per hour per inmate for work performed[,]
including training hours and hours in excess of the
inmate's normal shift."
payment provision further states,
SCDC shall be responsible to pay inmate workers, cover
security costs and [Prison Industries] overhead,
including any costs for health, safety and welfare of the
inmates, taxes or other payroll deduction. . . .
Thirty (30) days prior to each anniversary date of this
agreement, SCDC and [WTI] may negotiate an increase in the
per hour rate paid by [WTI] to SCDC. If such an increase is
requested, it shall be limited to a maximum of five percent
(5%) annually or the annual percentage increase in the
Consumer Price Index, whichever is lower. It is the
intent of the parties that such increase shall only reflect
SCDC's increased costs of prison overhead .
[WTI] and SCDC may mutually agree upon a bonus plan for
inmates based on productivity and quality control. Such bonus
will be paid in its entirety by [WTI] to SCDC for
distribution to inmates.
(emphases added). The contract's cover page highlights
the contract's " Requirements/Specifications,"
which include " Wage Rate: $4.00 per hour/per inmate;
$.35/[hour] base for inmates." Also, the contract's
terms concerning " Bonus Pay/Programs" indicate
that the " starting base pay" for participating
inmates is $0.35 per hour.
20, 2001, the legislature enacted the first of a series of
yearly budget provisos, effective for the fiscal year
beginning July 1, permitting SCDC to pay participating
inmates less than the prevailing wage for " service
The Director of [SCDC] may enter into contracts with private
sector entities that would allow for inmate labor to be
provided for prison industry service work. The use of such
inmate labor may not result in the displacement of employed
workers within the local region in which work is being
performed. Service work is defined as any work such as
repair, replacement of original manufactured items,
packaging, sorting, labeling, or similar work that is not
original equipment manufacturing. The department may
negotiate the wage to be paid for inmate labor provided under
prison industry service work contracts, and such wages may be
less than the prevailing wage for work of a similar nature in
the private sector.
H. 3687, Appropriation Bill 2001-2002, Part IB § 37.31
(Act No. 66, 2001 S.C. Acts 738) (emphasis added). The
legislature enacted identical, or nearly identical, provisos
for each following fiscal year until the 2007-2008 fiscal
year, and on August 1, 2007, section 24-1-295 of the South
Carolina Code, which codified the language in the provisos,
became effective. See S.C. Code Ann. §
24-1-295 (Supp. 2015) (" [SCDC] may negotiate the wage
to be paid for inmate labor provided under prison industry
service work contracts and export work contracts, and these
wages may be less than the prevailing wage for work of a
similar nature in the private sector." ). This
legislation also established mandatory deductions from the
" gross earnings of the inmates engaged in prison
industry service work in addition to any other required
began working under the WTI contract in 2004--he received his
first paycheck on October 18, 2004, and he filed his "
Step 1" Inmate Grievance Form with SCDC on this same
date. In his grievance, Inmate requested the negotiated wage
of $4.00 per hour. SCDC's Inmate Grievance System Policy,
designated as Policy GA-01.12, provides for formal review of
inmate complaints in two steps. A Step 1 grievance is
evaluated by the prison's Warden, and any appeal from the
Warden's decision to the " responsible
official," is designated as " Step 2." The
responsible official must render a decision on the appeal
within sixty days, and this decision constitutes SCDC's
final response in the matter.
October 28, 2004, Lieber's Warden denied Inmate's
Step 1 grievance. On November 8, 2004, Inmate filed his Step
2 Inmate Grievance Form, challenging SCDC's denial of the
requested relief. On May 14, 2007, SCDC issued a final
decision on Inmate's Step 2 grievance, basing its denial
of relief on both the merits and the fifteen-day filing
deadline set forth in paragraph 13.1 of Policy
Inmate then appealed SCDC's decision to the ALC.
to SCDC, Inmate received his last paycheck on April 13, 2009,
during the pendency of his appeal to the ALC. On April 29,
2014, the ALC upheld SCDC's denial of Inmate's
grievance on the ground that the deductions taken by SCDC
from Inmate's gross wages were proper. This appeal
1. Did the ALC err in denying Inmate's motion to
supplement the record?
2. Did the ALC err in applying section 24-1-295 of the South
Carolina Code (Supp. 2015) rather than section 24-3-40 of the
South Carolina Code (2007) to determine the deductions from
Inmate's gross wages?
3. Did the ALC err in holding that security and overhead
constituted " other required deductions" for
purposes of section 24-1-295?
4. Does section 24-1-295 apply retroactively to Inmate's
pre-August 1, 2007 work?
5. Did the ALC err in holding that the issue of overtime was
not preserved for review?
6. Did the ALC err in denying Inmate's request for
pre-judgment interest, post-judgment interest, costs, and
7. Did the ALC err in declining to consider whether SCDC
should process grievances for all inmates participating