Minimum Wage to Increase in Nevada

Nevada minimum wage will increase again on July 1, 2021 and on July 1st of each year until 2024.  As each year these changes will impact overtime requirements and eligibility, Nevada employers should review their payroll and time-keeping practices to ensure compliance with current wage and hour law.

Under Nevada’s two-tier minimum wage system, an employer who provides qualifying health benefits may pay its employees a lower minimum wage than if no such health benefits are provided.  Currently, and since July 1, 2020, the minimum wage is $8.00 for employers who offer qualifying health benefits and $9.00 for employers who do not.  Effective July 1, 2021, these rates will increase to $8.75 and $9.75, respectively, pursuant to NRS 608.250.  Thereafter, the minimum wage will increase by 75 cents on July 1st of each year until 2024 when the minimum wage reaches $11.00 and $12.00.  Each time the minimum wage increases, so too will the threshold rates for purposes of determining daily overtime eligibility.

Under NRS 608.018, nonexempt employees are generally entitled to overtime pay for all hours worked over 40 in a workweek, whereas only those nonexempt employees whose hourly rates are less than 1.5 times the applicable minimum wage are entitled to overtime pay for all hours worked over 8 in a workday.  For the last year, this has meant that nonexempt employees have been eligible to receive daily overtime pay only if their hourly rates are less than $12.00 or $13.50, depending on whether the employer provides qualifying health benefits.

When the minimum wage increases on July 1, 2021, however, these threshold rates for daily overtime will increase to $13.125 (with benefits) and $14.625 (without benefits).  This means that some previously ineligible employees will become entitled to receive overtime compensation for all hours worked over 8 in a workday.

As a result, employers offering health benefits will now be required to pay daily overtime to nonexempt employees with hourly rates between $12.00 and $13.12, and employers who do not offer health benefits will be required to pay daily overtime to nonexempt employees whose hourly rates of pay are between $13.50 and $14.62.  Accordingly, in addition to increasing the hourly rate for all minimum-wage workers and paying daily overtime to currently eligible employees, Nevada employers should determine whether currently ineligible employees will become eligible to receive daily overtime.

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