Nevada: Interpreting “Health Benefits” for Minimum Wage Requirements


All Employers with NV Employees


May 31, 2018


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Nevada employers are permitted to pay the state’s lower-tier minimum wage rate if they offer health benefits. In MDC Restaurants, LLC v. The Eighth Judicial Dist. Court, the Nevada Supreme Court recently clarified what constitutes “health benefits.” Because the difference between the upper-tier and lower-tier minimum wage rates is $1.00, the court used “common sense” in stating that health benefits must be “at least equivalent to the one dollar per hour in wages that the employee would otherwise receive” and cost the employer at least an additional dollar in wages.

The state Minimum Wage Act otherwise defines “health benefits” as benefits that “are available to the employee for the employee and the employee’s dependents at a total cost to the employee for premiums of not more than 10 percent of the employee’s gross taxable income from the employer.” Corresponding regulations add that “health insurance” refers to plans that include “those categories of health care expenses that are generally deductible by an employee on his individual federal income tax return…”

Although some clarity was achieved, this ruling adds more questions to how the cost to the employer should be calculated. Employers may want to be cautious going forward if using the lower-tier rate until further clarity is provided.

Action Items

  1. Review and update minimum wage rates paid to employees in accordance with this new ruling.
  2. Review health insurance benefits offered to employees for compliance with this new ruling.
  3. Update payroll procedures and practices accordingly.
  4. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2018 ManagEase

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