By Jennifer McMenomy
The 2019 Nevada Legislative Session may be over, but the sweeping statutory and policy changes made by the body are just now beginning to take effect. One such legislative change addressed during the session is the increase of the statewide minimum wage for private employers. As a business owner, it is important to be compliant with the latest federal and state minimum wage requirements in order to avoid legal consequences.
Prior to the most recent legislative session, the minimum wage in Nevada was $7.25 per hour if the employer provided health insurance to the employee being paid the minimum wage. If the employer did not provide health insurance to the employee, the minimum wage was $8.25 per hour. Additionally, Nevada law previously stated that it was the statutory duty of the Nevada Labor Commissioner to establish the minimum wage in accordance with federal law.
Assembly Bill (AB) 456 was introduced on March 25, 2019 by Speaker Jason Frierson and the Assembly Committee on Commerce and Labor. The bill increases the minimum wage required to be paid by private employers. The bill eliminates the Labor Commissioner’s establishment and duty of maintaining the minimum wage and instead enumerates the requirements set by the Legislature in statute. Under the new law every private employer must pay each employee $8.00 per hour of work if the employer offers health insurance to the employee and $9.00 per hour if the employer does not offer the employee health insurance.
In addition to setting the minimum wage, the bill also provides that the minimum wage will increase each year. The new law provides that the minimum wage increases by $.75 on July 1 of each year until 2024. At that time, the minimum wage will reach $11.00 per hour if health benefits are provided and $12.00 per hour if health benefits are not provided. Therefore, employers must be cognizant of the fact that the minimum wage continues to rise by $.75 each year until 2024 and that they are required by law to raise their minimum-wage employees’ wages on the 1st of July each year.
The new law also provides that any employee that prevails in a civil action against an employer for failing to pay the minimum wage is entitled to all remedies under both state and federal law as well as reasonable attorneys’ fees and costs. Thus, employers who violate the requirements of the statute will not only risk facing federal and state civil penalties as well as liability for back wages, but may also be required to pay the attorneys’ fees and costs of any employee who brings forward such a suit.
The passage of AB 456 was a departure from maintaining the minimum wage at the federal level. Presently, the federal minimum wage as it is set forth in the Fair Labor Standards Act is $7.25 per hour and has not increased since July 2009. On July 18, 2019, The House of Representatives voted to pass H.R. 582, more commonly referred to as the “Raise the Wage” Act which would raise the federal minimum wage to $15.00 over a period of six years. According to a U.S. House of Representatives report, the “Raise the Wage” Act would raise wages for approximately 40 million Americans. The Senate will now consider the measure and whether to pass it. It would also need to be signed by the President to become federal law.
If the “Raise the Wage” Act passes it would require employers to pay their minimum wage employees $8.55 per hour effective within three months from the time of passage of the bill. After one year, the minimum wage would raise to $9.85 per hour. Thereafter, each year the minimum wage would raise to $11.15 per hour, $12.45 per hour, $13.75 per hour and finally $15.00 per hour, respectively. Tipped employees making minimum wage would fall within a different standard under the “Raise the Wage” Act. If the Act passes, employers would be required by federal law to follow the standards set forth by Congress and the provisions of AB 456 would no longer apply.
While the National “Raise the Wage” Act is still being considered by Congress and has not become law, AB 456 is the law in Nevada. The bill was signed by Governor Sisolak on June 12, 2019 and became effective July 1, 2019. Therefore, as of July 1, 2020, all private employers in Nevada are required to pay their employees a minimum wage of $8.00 per hour if the employer offers health benefits to the employee and $9.00 per hour if the employer does not offer health benefits to the employee.
In addition to raising the minimum wage, the new law also provides language that allows the Nevada Labor Commissioner the ability to adopt any necessary rules and regulations to administer and enforce the newly enacted minimum wage law.
It is imperative for business owners to stay abreast of such changes made at the Legislature in order to ensure that their business is compliant with the latest laws and regulations. The nuances regarding labor law are many, varied, and oftentimes complex. It is advised that business owners consult with knowledgeable and experienced legal counsel to ensure the adoption of policies and practices that are within the bounds of all federal, state, and local labor laws.