Nevada Supreme Court ruling on minimum wages mixed
October 27, 2016
The Nevada Supreme Court on Thursday issued a mixed ruling in the battle over the state’s constitutional minimum wage law.
The battle is over the provision that allows employers to pay workers a dollar an hour less if they offer a qualified health plan. At present that would be $7.25 an hour instead of $8.25 for businesses that don’t offer a health plan. The provision also requires that health plan not cost the employee more than 10 percent of their pay.
The opinion by Justice Michael Douglas says the constitutional language requires the health insurance plan “must be made available to the employee and any dependents of the employee.” It doesn’t, he wrote, say employees must actually enroll in the health plan for the company to qualify to pay the lower rate.
But the opinion states the constitutional language specifically says the plan can’t cost more than “the employee’s gross taxable income from the employer.” The opinion says that language specifically prohibits counting tips and gratuities as part of a worker’s wages because they don’t come from the employer.
Bradley Schrager, attorney for the restaurant employees challenging the labor commissioner, said he was disappointed the court found all the employer has to do is offer a health plan whether or not the workers accept it.
He said many workers refused to sign up for what he said are overpriced and bad health plans.
But Schrager said he was pleased the court ruled employers can’t count worker tips as part of the employee’s taxable wages to calculate the 10 percent maximum premium.
Schrager said that allowed businesses to offer much more expensive health plans than minimum wage workers could ever afford and, when they failed to sign up, pay them a dollar less.
He said the issue will not actually be resolved until the court rules in another case naming the same list of businesses as defendants. In that case, he said a district court has already ruled for the employees some plans offered by businesses are inadequate and don’t qualify under the constitution. That ruling is before the high court on appeal.
“The court will still have to determine whether the junk benefits plans most employers offer to their minimum wage employees qualify as health insurance at all,” he said. “We certainly believe they do not.”
The opinion was signed by all six justices.
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