Complexity comes with $1 minimum wage hike
November 9, 2006
Tangled in the complexity of the minimum-wage hike passed this week by voters are new requirements for employers starting Nov. 28.
“This is so new and complicated,” said State Labor Commissioner Michael Tanchek. “Over the long run, we’re going to have to see how this stuff is going to get interpreted.”
The amendment sets up a two-tiered minimum wage system in Nevada, the labor commissioner said Thursday. Employers who offer a qualified health insurance plan to their minimum-wage employees can continue to pay $5.15 an hour, whether or not employees take the health plan. Employers who don’t offer a qualified plan will have to pay at least $6.15 an hour.
A qualified plan means that employees and their dependents are covered at a cost to the employee that does not exceed 10 percent of the employee’s gross taxable income.
That means, health insurance for an employee who makes about $10,000 a year must cost less than $1,000.
When voters approved Question 6 on Tuesday, they probably didn’t know they were also approving a change in overtime pay, Tanchek said.
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Employees who are offered the health insurance plan by their employer will be entitled to daily overtime, hours worked over eight, if they make less than $7.73 an hour.
Employees who are not offered the health plan will have to be paid daily overtime, if their hourly rate is less than $9.23 an hour.
“Daily overtime is triggered by the minimum-wage rate,” Tanchek said.
Current Nevada law requires employers to pay overtime for more than 40 hours worked in a week. Daily overtime is only paid to those who make $7.73 an hour or less.
Nevada’s overtime law is often seen as an incentive for new businesses. Tim Rubald, executive director of the Nevada Commission on Economic Development, said this change won’t make a difference in the retention and recruitment of big business.
“The businesses we look at don’t pay anything close to minimum wage, they pay five times that,” Rubald said. “The businesses we deal with are paying $20 an hour on average, so I don’t think it will affect recruitment.”
Steve Forester, general manager of Casino Fandango, said the change will only slightly affect his company.
“Typically, the minimum wage positions would be dealers, bar tenders and servers, but we’re pretty much paying more than that,” he said.
Forester said the economic effects at Casino Fandango because of the minimum-wage hike will be “less than the cost of a small car.”
• Contact reporter Becky Bosshart at email@example.com or 881-1212.
• Minimum wage will increase from $5.15 an hour to $6.15 an hour starting Nov. 28. This affects minimum-wage earners who are not offered a qualified health insurance plan by their employers.
Who is exempt?
• The only exemption is for those under the age of 18 who are employed by a nonprofit organization for the summer or after school, or employed as trainees for less than 90 days.
• That means domestic service employees, outside salespersons, agricultural workers, taxicab and limousine drivers, casual baby-sitters and severely handicapped persons with state employment certificates are no longer exempt from the minimum-wage law.
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