Nevada Employers Need To Update Their Noncompetition Agreements And Employment Applications By October 1

Due to several new laws passed by the Nevada Legislature that take effect October 1, 2021, it is time for Nevada employers to review and modify their noncompetition agreements and employment applications to avoid potential legal liability.

First, Assembly Bill 47 significantly increases Nevada’s existing restrictions on noncompetition agreements  by prohibiting the use of such agreements with any “employee who is paid solely on an hourly wage basis, exclusive of any tips or gratuities.” In addition, it adds new penalty provisions to NRS 613.195, requiring a court to order employers to pay employees their reasonable attorney’s fees and costs in any legal action brought by an employer to enforce a non-competition covenant or any legal action by an employee to challenge a non-competition covenant where the court finds that the agreement violates NRS 613.195.

While AB 47 does not expressly state whether its provisions are applicable retroactively to agreements signed prior to October 1, 2021, Nevada employers should examine their existing noncompetition agreements with the new law in mind and make any needed modifications. 

Second, Senate Bill 293 amends Nevada law to prohibit most employers, both private and public, from seeking the wage or salary history of an applicant for employment, relying on the wage or salary history of an applicant to determine whether to offer employment or to determine the rate of pay for the applicant, or refusing to interview, hire, promote or employ an applicant, or discriminate or retaliate against an applicant if the applicant does not provide wage or salary history. It also requires employers to provide an applicant who has completed an interview the wage or salary range or rate for the position, promotion or transfer at issue; if no interview is conducted, the wage or salary information must be provided once an offer has been made if requested. SB 293 provides an exemption for religious organizations, nonprofits, and certain businesses on or near an Indian reservation, but such organizations should consult with counsel regarding the precise scope of this exemption.   

As such, Nevada employers should update their employment applications (and any other hiring documents or electronic programs/portals) to ensure they are no longer asking applicants to disclose their prior wage or salary. Employers should also train supervisors and managers on the new salary history limitations and salary range disclosure requirements.

KZA’s attorneys are available to help you prepare for these changes and address any questions you may have. KZA clients can obtain a complimentary copy of our form employment application by contacting Kathleen Knight at [email protected]. 

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.