Nevada Supreme Court clarifies confusions on minimum wage law

By Michelle de Leon | Jan 5, 2017

CARSON CITY, Nev. (Legal Newsline) – The Nevada Supreme Court has released two separate rulings to clarify the widely controversial issues linked to the Minimum Wage Amendment made to the Nevada Constitution.

In two en banc decisions, the Nevada Supreme Court aimed to settle the disputes arising from the confusion on the changes made in the state’s Minimum Wage Law. The justices used their rulings in the cases MDC Restaurants, LLC et al v. The 8th Judicial District Court and Perry v. Terrible Herbst Inc. to clarify the issues. To date, the Nevada Supreme Court provided three concrete points to use as references in future cases.

The pertinent portions of the Nevada Minimum Wage Amendment are as follows:

“Each employer shall pay a wage to each employee of not less than the hourly rates set forth in this section. The rate shall be [$5.15] per hour worked, if the employer provides health benefits as described herein, or [$6.15] per hour if the employer does not provide such benefits. Offering health benefits within the meaning of this section shall consist of making health insurance available to the employee for the employee and the employee's dependents at a total cost to the employee for premiums of not more than 10 percent of the employee's gross taxable income from the employer.”

The first point clarifies the health insurance issue in the amended law. According to the justices, the employers must first offer and enroll their employees in a health insurance policy. It is only when they successfully fulfill these obligations that they would be able to comply with the law’s requirement to “provide” health insurance. Hence, employers would only be allowed to pay their employees a dollar an hour less if they actually provide a certified health plan. Moreover, the Minimum Wage Amendment sets a limit of 10 percent of an employee’s pay for the health plan expenses.

As for the second point, the Nevada Supreme Court explained that the issues based on the changes brought forth by the Minimum Wage Amendment only has a lifespan of two years. 

That is, the parties involved in any dispute could seek the amended law’s protection within a two-year statute of limitations. Hence, employees must ensure that they bring their claims to the courts within the said time frame.

Meanwhile, the third point focuses on the calculation of insurance premiums for the employees. According to the rulings, the employers must not include in their computation the tip income of their workers. 

The justices pointed out that the employers do not have the authority to claim the tips earned by the employees during their work hours as part of the latter’s income. That is, these tips could not be described as money earned “from their employers.”

According to the Nevada Supreme Court, the decisions it recently released would serve all cases retroactively starting from the inception of the Minimum Wage Amendment. These rulings are anticipated to substantially affect a number of pending class action cases as well as cause major changes to the businesses of several employers in Nevada.

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