Minimum Wage Increase Takes Effect 11/28/06

Volume 5, Issue 15
November 17, 2006

On November 7, 2006, Nevada voters approved Question 6 - a measure to amend Nevada's Constitution and increase Nevada's minimum wage from the current federal level of $5.15 to $6.15 per hour. The amendment becomes effective on November 28, 2006. The effects of the amendment are set forth below.

Wage Amount Increases And Will Fluctuate

Nevada's Labor Commissioner, Michael Tanchek, explained in a November 8, 2006 press release that the "amendment sets up a two-tiered minimum wage system for Nevada." Employers who offer a qualified health insurance plan to their employees must pay a minimum wage of $5.15 per hour. Employers who do not make a qualified plan available must pay at least $6.15 per hour. A qualified plan is a health plan which provides coverage for the employee and his/her dependents at a cost to the employee that does not exceed 10% of the employee's gross taxable income.

The amendment also ties Nevada's minimum wage to inflation. As such, the minimum wage will be adjusted yearly by the amount of increases in the federal minimum wage over $5.15 per hour, or, if greater, by the cumulative increase in the cost of living. The adjusted rates will be announced each April 1 and will take effect the following July 1.

Exemptions Are Eliminated

The Labor Commissioner's press release also explained that the only exemption now permitted from Nevada's minimum wage requirement is for employees who are under the age of eighteen who are employed by nonprofit organizations for after school or summer employment or employed as trainees for a period not longer than 90 days. The prior exemptions for domestic service employees, outside salespersons, agricultural employees, taxicab and limousine drivers, and casual baby sitters, as well as the special minimum wage for severely handicapped persons, no longer apply. Any employees exempt under the after school, summer, or trainee exemption must still be paid at least $5.15 an hour as provided by federal law.

CBA Waivers Permitted

The amendment does not allow an individual employee and employer to waive the new minimum wage rate. However, the new provisions may be waived by a bona fide collective bargaining agreement if the waiver is explicitly set forth in the agreement in clear and unambiguous terms. Such a waiver may not be made unilaterally by either party to a collective bargaining agreement. Despite this provision of Nevada law, a collective bargaining agreement cannot waive the federal overtime requirement of $5.15 an hour.

Daily Overtime Changes

The amendment necessarily changes Nevada's daily overtime requirement for employees earning less than one and one-half times the minimum wage. If an employer offers a qualified health plan to employees, the requirement remains the same: Any employee earning less than $7.725 an hour must be paid overtime for all hours worked in excess of 8 in a day. Employers who do not offer a qualified health plan, however, are now required to pay daily overtime to employees who are earning less than one and one-half times the new minimum wage - $9.225 per hour.

Remedies Expanded

Finally, the amendment protects from retaliation employees who bring civil actions against non-compliant employers and permits remedies such as back pay, damages, reinstatement, injunctive relief, and attorney's fees and costs for violations of the minimum wage requirement.

The amendment to Nevada's Constitution is found in Article 15, § 16 of the Nevada Constitution and is available to view at:

Nevada Revised Statute § 608.18 regarding overtime may be found at:

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.