Understanding and responding to the business and legal impacts of COVID-19

Nevada Minimum Wage to Increase on July 1, 2020

Nevada minimum wage will increase for the first time in nearly a decade on July 1, 2020, and on July 1st of each year until 2024. Because 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 2011, the minimum wage is $7.25 for employers who offer qualifying health benefits and $8.25 for employers who do not. Effective July 1, 2020, these rates will increase to $8.00 and $9.00, respectively. 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 overtime eligibility.

Under NRS 608.018 any nonexempt employee whose hourly rate is less than 1.5 times the applicable minimum wage is entitled to overtime pay for all hours worked over 40 in a workweek and over 8 in a workday. For the past decade, this has meant that nonexempt employees have been eligible to receive overtime pay only if their hourly rates are less than $10.875 or $12.375, depending on whether the employer provides qualifying health benefits. However, along with the minimum wage increase effective July 1, 2020, the threshold rates for overtime will increase to $12.00 and $13.50. This means that some previously ineligible employees will now be entitled to overtime compensation.

For those employers who offer qualifying health benefits, any nonexempt employee with an hourly rate between $10.86 and $11.99 will become entitled to overtime compensation for all hours worked over 40 in a workweek and over 8 in a workday. Similarly, those employers who do not offer qualifying health benefits will be required to pay daily and weekly overtime to those nonexempt employees whose hourly rates of pay are between $12.38 and $13.50. Accordingly, in addition to increasing the hourly rate for all minimum-wage workers, Nevada employers should determine whether any employees will become eligible to receive overtime.


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