New law raises minimum wage to $12 per hour, or $11 per hour if health insurance is offered
Despite substantial opposition to the move, Nevada’s private employers will be paying a higher minimum wage under a bill recently signed by Governor Steve Sisolak.
The law mandates that starting July 1, 2020, employers will have to pay $9 an hour if the employer does not offer health benefits and $8 an hour if the employer offers health benefits.
The wage will increase by $0.75 on July 1 of each year until it reaches $12 an hour if the employer does not offer health benefits and $11 an hour if the employer offers health benefits.
Nearly 300,000 workers will be affected, according to a study by the Washington, D.C., think-tank Economic Policy Institute.
Two-tiered minimum wage
Nevada has a two-tiered minimum wage with employers that offer health benefits paying less per hour than those employers who do not offer a health plan.
If an employer offers health benefits to an employee and his or her dependents, employers can pay a lower hourly minimum wage.
The bill represents the first significant change to Nevada’s minimum wage in over a decade, according to the governor’s office.
Nevada’s minimum wage is currently $8.25 an hour if the employer does not pay health benefits and $7.25 an hour if the employer offers health benefits.
The new law also removes certain exceptions to the minimum wage, which was ruled to be unconstitutional by the Nevada Supreme Court, according to the bill’s text.
Nevada has exempted taxicab and limousine drivers from minimum wage requirements since the 1970s because they are paid based on commission. In 2006, Nevada voters approved an amendment to the Nevada Constitution that set new minimum wage standards but failed to expressly repeal certain exemptions, including the taxicab exemption.
In a 2014 decision, Thomas v. Nevada Yellow Cab Corp., the Nevada Supreme Court held that taxicab companies were required to pay drivers the state’s minimum wage because the 2006 Minimum Wage Amendment to the Nevada Constitution repealed the long-standing exception for taxicab drivers from statutory minimum wage requirements, according to an analysis from law firm Ogletree Deakins.
Sisolak signed the bill on June 12. The law became effective on July 1, 2019.
Employees can bring minimum wage violation actions against their employer in a civil action, according to the bill’s text. If the employee prevails, the worker is entitled to remedies that include back pay, damages, reinstatement, or injunctive relief and reasonable attorney’s fees and costs.
The new law specifies that the statute of limitations to bring a civil action is two years. There had been some confusion over that issue because the 2006 Minimum Wage Amendment had not specified a statute of limitations, leading to questions as to whether a two-year or a four-year deadline for bringing claims applied. In a 2016 decision, the court held that the two-year statute of limitations applied to claims brought by an employee against an employer in instances alleging violation of the 2006 Minimum Wage Amendment.
A contract between an employer and an employee or acceptance of a lesser wage is not a bar to bringing a civil action, the law states.
The Labor Commissioner will administer and enforce the law.
In hearings conducted before the bill was signed, the measure’s opponents argued against adoption of the proposed legislation.
The state’s 200,000 locally-owned and operated businesses will be hurt by the bill, state director of the National Federation of Independent Businesses, Randi Thompson, said in testimony provided on the state’s legislative website.
“Raising minimum wage is great for those who keep their jobs – and it sucks for those will lose their job,” Thompson said, adding that, “in this strong economy, most small businesses aren’t paying minimum wage.”
He also said that when wages increase to $12, “it amounts to a 50% to 58% increase in an employer’s payroll” and that more and more companies will turn to automation when labor becomes more expensive because of mandates such as artificially raised wages, overtime requirements and paid leave.
Mac Potter, COO, Nevada Casino Holdings, LLC, also opposed the bill. He said he was representing Nevada Casino Holdings and Las Vegas Wendy’s Restaurants group. Potter said that when faced with tip credit/minimum wage increases, the company automated its casino surveillance system, allowing it to reduce staffing by 15 workers, and leading to it saving enough money to afford the cost of raises for the remaining workers.
Potter also noted that Wendy’s is installing kiosks and automated grills that are expected to save about 200 labor hours a week.
“There go five jobs per store, 130 jobs lost to automation due to increased wage costs,” he said.
Daniel Honchariw, senior policy analyst for the Nevada Policy Research Institute, explained NPRI’s opposition to the bill. “By raising the minimum wage by nearly 50% over the next several years, AB456 will deny job opportunities to those most in need of gaining work experience, while likely requiring certain businesses to lay-off employees and/or reduce hours worked,” Honchariw said.
Honchariw also noted that “even proponents of increasing the minimum wage caution that a minimum wage should never exceed half of the local median wage. AB456 would set Nevada’s minimum wage well above that level.”
Minimum level of health insurance
Another bill signed by the governor defines the minimum level of health insurance that employers will be required to provide to employees and their benefits in order to pay the lower minimum wage.
In general, at least one health benefit plan must provide ambulatory patient services; emergency services; hospitalization; maternity, and newborn care; mental health and substance use disorder services, including, without limitation, behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventative and wellness services, and chronic disease management; and pediatric services, which don’t have to include oral and vision care. The level of coverage must be “actuarially equivalent to at least 60 percent of the full actuarial value of the benefits provided under the plan.”
The employer requirements go into effect on Jan. 1, 2020. The bill was signed by the governor on May 21, 2019.
Other developments in Nevada employment law
The governor also signed several other significant employment law bills on June 12.
- Senate Bill 312, requires that employers with 50 or more workers must allow workers to accrue earned paid leave, up to 40 hours per year at a minimum, starting Jan. 1, 2020.
- Senate Bill 166 adds elements from the federal Lilly Ledbetter Fair Pay Act from 2009 into state law and grants the Nevada Equal Rights Commission increased regulatory authority to handle gender discrimination complaints in the workplace, starting Jan. 1, 2020.
- Senate Bill 135 gives state workers “a seat at the table” for the first time in Nevada history by empowering them to collectively bargain, according to the governor’s office.
Here is a list of minimum wage for every state.