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Nevada’s Unique Two-Tiered Minimum Wage System: What Employers Need to Know

Navigating a landscape where state workplace laws differ from their federal counterparts remains a daunting challenge for employers with a multi-state footprint. In an article titled “State Laws Muddle Large Employers’ Quest for Consistency,” Law360 analyzed unique laws in Nevada, California and New York that create special legal obligations for employers. Law360 interviewed Employment and Labor Law attorney Chelsea Latino about Nevada’s complex two-tiered minimum wage system which is also linked to overtime pay and health benefits. As Chelsea explained, “we are seeing businesses starting new operations in Nevada that are seeking advice on Nevada-specific changes to their handbook or just a separate Nevada supplement because Nevada has some unique differences in employment laws.”

Chelsea’s quoted comments from the Law360 article are excerpted below.

Nevada’s Complicated Minimum Wage and Overtime Rules

Chelsea Latino of management-side firm McDonald Carano LLP said that in Nevada where her practice is based there has been a boom in business generally. But there’s also demand for lawyers whom employers outside the state are turning to for expertise about how to align their policies to match employment and wage requirements that can differ significantly from elsewhere in the country. In her state, Latino said one of the more confounding issues employers face — particularly those that are new to doing business in Nevada — is navigating a unique two-tiered minimum wage system that is also tied to overtime pay and health benefits.

  • The Silver State’s higher tier requires employers to pay workers who are not legally exempt from minimum wage requirements at least $9.75 per hour, which is $1.50 higher than the federal wage floor. However, employers can opt for a lower $8.75 per hour minimum wage tier if they provide workers with employer-sponsored health insurance. “Since July 2019, and on July 1 of each year until 2024, minimum wage rates increase in $.75 increments,” Latino said. “And then this also ties into Nevada’s unique overtime requirements.”
  • Like the federal Fair Labor Standards Act, Latino noted that Nevada employees are entitled to weekly overtime when they exceed 40 hours worked. But Nevada imposes an additional requirement that employers must pay some workers time-and-a-half if they work more than eight hours in a 24-hour period even if the worker’s total hours for the week do not clear the 40-hour threshold.
  • Moreover, workers’ eligibility for daily overtime depends on their hourly wage rate, Latino noted. “Essentially, if the employee’s rate of pay is less than one-and-a-half times the applicable minimum wage rate — again, that threshold [eligibility] amount will depend on whether the employer offers qualifying health benefits or not — … then they are eligible to receive overtime,” Latino said. “This has been particularly tricky both for new businesses coming to Nevada but also all employers in Nevada, because they might not catch that each July 1 when the minimum wage rate increases, that also corresponds with overtime,” she added. “So it necessarily increases the potential amount of employees who will be eligible for daily overtime.”

Chelsea is available to answer questions about Nevada’s unique minimum wage laws and overtime regulations, including a recent Nevada Supreme Court decision in A Cab, LLC v. Murray which provides guidance to employers on two key questions: (1) how to properly inform employees of the annual minimum wage rate adjustments and (2) how to maintain records of wages and hours worked by employees.

About McDonald Carano

In 2024, McDonald Carano celebrates 75 years of serving Nevada’s legal, business, government, and civic communities. More than 60 lawyers and government relations professionals serve state, national, and international clients from our offices in Reno, Las Vegas, and Carson City. McDonald Carano provides legal services and government affairs and advocacy counsel to startups, corporations, trade associations, nonprofits, public entities, high-net-worth individuals, investors, and public-private partnerships throughout Nevada. We are proud to be your Nevada law firm since 1949.

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