Out With The Old, And In With The New
The past two years have seen some dramatic changes to Nevada employment law. Between activity from the Nevada Supreme Court, new laws that took effect in 2021 and 2022, the decline in COVID cases and the gradual return to the office, Nevada employers have seen some dramatic shifts in the workplace.
TALG has been monitoring changes to Nevada laws and will publish articles regarding recent developments in Nevada employment law. TALG’s first article tackles most employers’ least favorite topic: wage and hour law. As 2022 draws to a close, Nevada employers should be aware of these recent developments to Nevada wage and hour laws in their preparation for 2023.
Minimum Wage Raises to $12/Hour in 2024
Nevada voters recently approved a constitutional amendment to raise the minimum wage, remove existing annual inflation adjustments to minimum wage, and allow the state legislature to pass minimum wage laws to adjust Nevada’s minimum wage going forward. The constitutional amendment eliminates Nevada’s two-tier minimum wage system—a system that was established by the Minimum Wage Amendment (MWA) to the Nevada Constitution in 2006—which allows employers that offer qualifying health benefits to employees to pay a lower minimum wage than employers who do not offer qualifying health benefits. Nevada is the only state in the nation with a two-tiered minimum wage system, and proponents of the constitutional amendment suggested a single minimum wage would make Nevada competitive with other states.
Under the new constitutional amendment, Nevada’s minimum wage will increase to $12/hour regardless of whether employees receive health benefits from their employer beginning on July 1st, 2024. The minimum wage in Nevada was already expected to increase to $12/hr. for employees that are not offered qualifying health benefits, however, the constitutional amendment also increases the minimum wage for employees that are offered qualifying health benefits from their employer. Ultimately, the single minimum wage should eliminate employers’ headaches surrounding what constitutes a qualifying health benefit under the MWA and Nevada’s wage and hour laws, as well as the claims associated with failing to pay the higher minimum wage if an employer does not offer qualifying health benefits.
Adjustments to Daily and Weekly Overtime
Before the constitutional amendment takes effect in 2024, employers should also be aware of the annual increases to Nevada’s minimum wage in 2023 and 2024. Under the current two-tiered system, minimum wages are expected to increase for employees offered qualifying health benefits to $10.25/hr. beginning July 1st, 2023 and then to $11.00/hr. beginning July 1st, 2024. Minimum wages for employees that are not offered qualifying health benefits will increase to $11.25/hr. beginning July 1st, 2023 and then to $12.00/hr. beginning July 1st, 2024.
Nevada’s minimum wage is also linked to an employer’s overtime obligations, which is generally broken down based on whether an employee makes 1 ½ times the minimum wage, and determines whether an employee is entitled to daily or weekly overtime. As a result of the upcoming changes to the Nevada Constitution, employers will no longer need to calculate two separate rates—one rate for employees offered qualifying health benefits with a lower minimum wage and another rate for employees that are not offered qualifying health benefits—to determine whether an employee is eligible for daily or weekly overtime. Employers should consult with their payroll departments or payroll processing services to ensure employees’ time is accurately captured, including daily overtime, to remain compliant with Nevada’s minimum wage and overtime laws.
Nevada Supreme Court Tackles Several Wage & Hour Issues
The Nevada Supreme Court recently weighed in on several issues involving employee classification (and misclassification), overtime for employees subject to a collective bargaining agreement (CBA), and aggregation of class action member’s damages to reach the statutory threshold to file lawsuits in Nevada district courts.
In Myers v. Reno Cab Co., 137 Nev. Adv. Rep. 36, 492 P.3d 545 (Nev. 2021), the Court addressed the issue of employee classification and reiterated that courts should evaluate the “economic realities” of the individual’s employment to determine whether the person is an employee or an independent contractor. In Myers, taxi drivers sued their employer in a class action asserting that they were paid less than the minimum hourly wage under the MWA (discussed above) and for waiting time penalties. The Court concluded that taxi drivers had a constitutional right to minimum wage if the workers satisfied the economic realities test, which is a non-exhaustive set of factors evaluating whether the “economic realities” of the worker is an employee or an independent contractor “who, ‘as a matter of economic fact, [is] in business for himself.’” Id. at 551 (quoting Henderson v. Inter-Chem Coal Co., 41 F.3d 567, 570 (10th Cir. 1994)). The Court also reiterated that NRS 608.0155—which sets forth the test for individuals that are presumed be independent contractors—only applies to claims falling under NRS Chapter 608 and does not apply to claims arising from the MWA or other chapters of the Nevada Revised Statutes. Notably, the Court also concluded that language in a contract was enough to establish that the individual was an employee. In the wake of the Court’s ruling, employers should evaluate their independent contractor arrangements and consult with counsel to determine whether certain employees may have been misclassified as independent contractors.
The Court also recently tackled several issues involving wage and hour claims in Martel v. HG Staffing, LLC, 515 P.3d 318, 138 Nev. Adv. Rep. 56 (Nev. 2022). In that case, the Court concluded a two-year statute of limitation applies to claims under NRS 608.016, 608.018, 608.020-608.050, which is similar to other wage and hour claims under NRS Chapter 608. The Court also held that waiting time penalty claims under NRS 608.040 (for failing to pay an employee all wages due after the employee’s separation) could not be used to recover wages for claims that are otherwise time-barred under other statutes. The Court clarified that employees subject to a collective bargaining agreement (CBA) may be exempted from Nevada’s statutory overtime requirements in NRS 608.018 if the CBA provides overtime in a “different way or manner” than NRS 608.018. The Court’s ruling provides clear guidance on the applicable statute of limitations for certain wage and hour claims, as well as the exemption of certain employees from NRS 608.018’s overtime requirements if they are subject to a CBA providing for overtime in another manner.
In A Cab, LLC v. Murray, 501 P.3d 961, 137 Nev. Adv. Rep. 84 (Nev. 2021), the Court also addressed whether plaintiffs in a class action may aggregate their claims under the MWA to meet the statutory threshold to establish a district court’s jurisdiction over the claims, and concluded that aggregation was permissible based upon recent amendments to NRCP 23 in 2019. The Court also rejected an argument that the 2-year statute of limitations for MWA claims was equitably tolled based upon the employer’s failure to provide written notice of yearly minimum wage increases because the employer provided notification of the current minimum wage by posting it in common work areas.
Interestingly, each of these recent cases relating to wage and hour claims were en banc opinions—meaning the cases were heard before the entire Nevada Supreme Court—and authored by Honorable Justice Stiglich. Given Justice Stiglich’s interest in wage and hour claims, we expect to see more opinions from her relating to Nevada wage and hour laws.
As the Nevada Legislature gears up for another legislative session in 2023, TALG will continue to monitor all employment and workplace laws affecting its clients in Nevada, so that our clients can best prepare for and adjust to these laws.
Reach out to TALG with any questions, comments or concerns.
