Social Security Board v. Nierotko

Social Security Board v. Nierotko (1946) 327 U.S. 358, considered whether an award of backpay to a wrongfully terminated employee constitutes wages for Social Security purposes. The employee was reinstated and awarded pay for the period he was not employed. (Id. at pp. 359-360.) The United States Supreme Court held the award constituted "wages under the Social Security Act definitions which define wages as 'remuneration for employment' and employment as 'any service ... performed ... by an employee for his employer.'" (Id. at p. 364; see 26 U.S.C. 3121(a), (b).) The court rejected the argument the award did not qualify as wages because no services had been performed. It explained that "wages" and "employment" should be interpreted broadly: "The very words 'any service ... performed ... for his employer,' with the purpose of the Social Security Act in mind, import breadth of coverage. They admonish us against holding that 'service' can be only productive activity. We think that 'service' as used by Congress in this definitive phrase means not only work actually done but the entire employer-employee relationship for which compensation is paid to the employee by the employer." (Nierotko, at pp. 365-366.)