As most employers are aware, Nevada has a two-tier minimum wage system, depending on whether the employer offers qualifying health benefits. Following Assembly Bill 456 (passed by the Nevada Legislature in 2019), each of those minimum wage levels will increase on July 1 of every year until 2024.

That means that, as of July 1, 2022, the minimum wage rate increased to $9.50 (up from $8.75) per hour if the employee is offered qualifying health benefits and $10.50 (up from $9.75) per hour if the employee is not.

Check to Confirm Whether Changes Affect Your Employees

At first glance, this may not seem like earth-shattering news. After all, if your employees are earning $15 per hour, then you don’t need to make any changes, right? Not so fast. Not only must employers track minimum wage increases to ensure they aren’t paying below-minimum wages, but they must evaluate whether the change to the minimum wage rate alters when employees must be paid overtime (not just how much they must be paid for these overtime hours).

In Nevada, all non-exempt employees are entitled to weekly overtime pay (meaning that they are entitled to be paid 1½ times their regular wage rate for all hours in excess of 40 per week). But employees whose regular wage rate is less than 1½ times the minimum wage rate are also entitled to daily overtime (meaning that they are entitled to be paid 1½ times their regular wage rate for all hours worked in excess of 8 hours per workday).

In other words, only employees who make less than $14.25 and have been offered health benefits and employees who make less than $15.75 and have not been offered health benefits are entitled to daily overtime.

This is important because some employees who were not previously entitled to daily overtime are now entitled to this form of compensation by law. If we use the example above of the employee who earns $15 per hour under the old overtime rate, that employee would be entitled to weekly overtime but not daily overtime. But overnight, as of July 1, 2022, that same employee, earning the same wage rate, must now be paid anytime their daily hours exceed eight.

Bottom Line

Given this recent turn of events, now is the time to perform a self-audit of your pay practices—both to confirm you are paying the minimum wage rate that is currently in effect, and to ensure that you’ve correctly classified your non-exempt employees as weekly versus daily-and-weekly overtime earners. You should also update your pay policies to reflect these changes (as well as plan for future minimum wages to come). Finally, as always, you should coordinate with experienced employment counsel on these issues.

Shannon S. Pierce and Kelly Peters are attorneys with Fennemore Law in Reno, Nevada. Shannon practices primarily in the areas of employment defense and commercial litigation. Kelly practices in the areas of business litigation and employment and labor.  You can reach them at spierce@fennemorelaw.com or kpeters@fennemorelaw.com.