Ruling in minimum wage case stands as appeal moves forward | NevadaAppeal.com

Ruling in minimum wage case stands as appeal moves forward

Labor Commissioner Shannon Chambers told a forum of more than a dozen businessmen on Tuesday that her office must enforce Carson District Judge James Wilson’s decision barring employers from counting tips to determine a worker’s minimum wage.

Under the Nevada Constitution, if the employer provides a health plan costing 10 percent or less of the worker’s take-home pay, the minimum wage is $7.25 an hour. If not, the minimum wage is $8.25 an hour.

Bradley Schrager filed suit on behalf of Cody Hancock and Kwok Yen Moy of Las Vegas and charged that the Labor Commission’s regulations illegally allowed employers to count tips and gratuities for purposes of determining the minimum wage, greatly inflating the income of tip employees. He argued that some employers offer health insurance they know is either sub-par or far more expensive than a worker can afford and, when the workers reject the insurance, use that to justify paying the lower minimum wage.

Chambers said no briefs have yet been filed in that appeal to the Nevada Supreme Court. But until that appeal is resolved, she said the decision is the law since Wilson has not issued a stay of his ruling.

That minimum wage is set according to a formula including inflation contained in an amendment to the Nevada Constitution.

“The drafters of the amendment expressly excluded tips and gratuities from the calculation of the minimum wage,” Wilson ruled.

He also ruled that the employer can’t simply offer health insurance to qualify for the lower pay rate, that the worker must accept it.

Chambers said that since it’s in the constitution, her office has no authority to change how it works.

“A lot of people out there don’t like the two-tier system” she said. “People say do away with it. I can’t do that.”

And she added that the Affordable Care Act throws more wrinkles into the mix, further complicating the task of writing new regulations.

She was joined by several in the audience including Las Vegas lawyer Steve Anderson who pointed out that, if a worker qualifies for a subsidy to buy insurance, that subsidized plan purchased through an exchange isn’t provided by the employer as mandated in the amendment. He said that raises the question whether that employer still would have to pay the higher wage or not since the worker would have insurance.

With the ACA in place, he and several others questioned whether the state should even try to regulate the issue.

“To the extent there are going to be regulations, the ACA would provide the framework for that,” he said.

Chambers said the goal of her office is to come up with “the fairest way of enforcing the amendment.”

Gaming lobbyist Bob Ostrovsky agreed saying the best scenario is to write rules that are easy to understand for both the employee and employer and easy to administer.

Chambers took no action at the meeting, saying they are working on their appellate briefs in an attempt to reverse Wilson’s decision.