Judge rules more workers eligible for higher pay rate under Nevada's 2-tier minimum wage law

Government And Institutions Associated Press

A Carson City judge's recent decision about Nevada's two-tier minimum wage law could mean more workers are eligible for the higher $8.25 per hour rate, rather than the $7.25 allowed if the employer provides health insurance.

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Judge James Wilson last month struck down two portions of Nevada code based on the minimum wage constitutional amendment voters passed in 2006. Nevada Labor Commissioner Shannon Chambers said this week that her office plans to ask for a stay so the ruling is not enforced while the case is appealed to the Nevada Supreme Court.

Wilson ruled Aug. 12 that employers cannot count tips when calculating whether an employee should get the higher or lower minimum wage. Under the invalidated code, an employer who didn't provide health insurance could say they're abiding by the rule and paying the required $8.25 an hour because the employee received tips on top of their base pay.

"The drafters of the Amendment expressly excluded tips and gratuities from the calculation of the minimum hourly wage," Wilson wrote, "and gave no other indication that tips and gratuities should be allowed as a form of credit against the cost of the health insurance benefits that the Amendment was designed to encourage employers to provide."

He also ruled that employers can't simply offer insurance, but the employee must accept it before the employer can pay the lower wage.

Proponents say employees sometimes reject their employer's insurance because the coverage is subpar or their required contribution is too high. But they say employees shouldn't have to give up an extra hour because of that decision.

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According to Wilson, the amendment "demands that employees not be left with none of the benefits of its enactment, whether they be the higher wage rate or the promised low-cost health insurance for themselves and their families."

Business representatives question why employers should be on the hook for the higher minimum wage rate even if they do everything they're supposed to do and the employee rejects the insurance through no fault of the business.

Tray Abney of the Reno-Sparks Chamber of Commerce said even a $1 hike can make a difference for an employer.

"Every dollar that the employer has to spend on these things is one less dollar they can spend on hiring people," he said.

Groups that are fighting for a higher minimum wage say they're watching the case and disappointed the state is expending resources to appeal the decision.

"We just hope the courts rule in favor of the low-wage workers to have real, useful health insurance," said Laura Martin, associate director of the Progressive Leadership Alliance of Nevada. "If not, just give them a $1 raise. Let's just care about workers, not just corporate profit margins."