## Facts

- Nierotko was a covered employee under the Social Security Act.
- His employer wrongfully discharged him, preventing him from working.
- In a later adjudicatory proceeding, Nierotko obtained a back-pay award covering the period he was kept out of work.
- During the back-pay period, he performed no services and received no contemporaneous wages; he received payment later in a lump sum.
- The Social Security Board refused to treat the back-pay period as covered “employment” or the award as “wages,” excluding it from his wage record used to compute benefits.

## Issues

1. Whether a period covered by a back-pay award for wrongful discharge constitutes “employment” under the Social Security Act even though no services were performed during that time.
2. Whether back pay awarded for that period constitutes “wages” that must be credited and allocated to the weeks the award covers when calculating Social Security benefits.

## Decision

- The Supreme Court affirmed judgment for Nierotko.
- The Court held that the back-pay period constituted “employment” within the meaning of the Social Security Act.
- The Court held that the back-pay award constituted “wages” for that employment and must be credited in the employee’s wage record.
- The Court rejected the Social Security Board’s narrower administrative interpretation that would deny wage credits absent actual work performed.

## Legal Principles

- “Employment” under the Social Security Act is not limited to periods of active, physical service; it includes the existence and incidents of the employment relationship.
- Back pay awarded for wrongful discharge is “remuneration” for covered employment and is allocable to the period for which it is awarded.
- A remedial social-welfare statute is construed to effectuate its protective purpose; an interpretation that would allow an unlawful discharge to create a lasting gap in wage credits conflicts with that purpose.
- Agency interpretations may receive respect, but they do not control when inconsistent with statutory language, structure, or purpose.

## Conclusion

Back pay awarded for wrongful discharge must be treated as Social Security “wages” and credited to the weeks it covers because the relevant period remains “employment” within the Act’s meaning, despite the employee’s lack of actual work during that time.


Soc. Sec. Bd. v. Nierotko, 327 U.S. 358 (1946)