Nevada has undergone a significant transformation regarding the legal landscape affecting Nevada’s Employers. Several of these new laws have just recently gone into effect or are slated to go into effect at the beginning of the new year. Below are some of the recent changes that Nevada employers should know about. 

Marijuana

As most employers know, Nevada allows both medical and recreational use of marijuana (despite marijuana being classified as a Schedule 1 drug under the federal Controlled Substance Act). Nevada’s marijuana statutes are already requiring employers to change some of their policies and procedures. However, last June, Governor Sisolak signed into law AB 132 (Pre-Employment Marijuana Drug Testing), which comes into effect on January 1, 2020.

AB 132 addresses pre-employment marijuana screening of job applicants and (with certain exceptions) prevents employers in Nevada from refusing “to hire a prospective employee because the prospective employee submitted to a screening test and the results of the screening test indicate the presence of marijuana.” The law also requires that if the new hire is subjected to a drug test within the first 30 days of employment that the employee is entitled “to submit to an additional screening test, at his or her own expense, to rebut the results of the initial screening test.” While not clearly explained, the law then requires that Nevada employers “give appropriate consideration to the results of the second test.”

Paid Leave

Also effective January 1, 2020, is Nevada’s Mandatory Paid Leave law. Specifically, SB 312 requires that every Nevada private employer with 50 or more employees (in Nevada) must provide paid leave to its employees of at least 0.01923 hours for each hour of work performed (including part-time employees). This amount equates to 40 hours of paid leave per year assuming a 40-hour work week. Note, the requirements of SB 312 are the minimum; employers can provide more generous paid leave benefits. In addition, Nevada employers:

• Can front-load the 40 hours of paid time off instead of the accrual method. 
• Can limit paid leave use to 40 hours per benefit year.
• Can limit the amount of paid leave to 40 hours per benefit year to carry over from one benefit year to the next.
• Are still not required to pay accrued but unused paid leave upon termination of employment.  Under the new law, however, if the employee is rehired within 90 days, then any previously accrued and unused paid leave hours must be reinstated.

Minimum Wage

Effective July 1, 2020, pursuant to AB 456, Nevada employers are required to pay a higher minimum wage. Traditionally, the minimum wage increase was a function of the Nevada Labor Commissioner; however, under AB 456, it is now part of Nevada law (NRS 608.250). Currently, as indicated in Article 15 § 16 of the Nevada Constitution, Nevada employers can pay the lower tier minimum wage ($7.25 per hour) if they provide “qualifying health benefits” to their employees. The higher tier minimum wage of $8.25 per hour must be paid by Nevada employers that do not offer qualifying health benefits. 

So, on July 1, 2020, the Nevada minimum wage will increase to $8 per hour if the employer offers qualifying health benefits and to $9 per hour if the employer does not offer qualifying health benefits. The Nevada minimum wage is also set to increase each July 1 until 2024. Specifically, the respective minimum wage tier will increase by $0.75 until the minimum wage with qualifying health benefits reaches $11 per hour and $12 per hour for Nevada employees who do not have qualifying benefits.

Note, the Nevada legislature also defined what constitutes “qualifying health benefits” that would allow a Nevada employer to pay the lower tier minimum wage. This definition goes into effect as of January 1, 2020.

Salary Basis Under FLSA

The Department of Labor issued its final rule revising the salary requirements for exemption from paying overtime (over 40 hours per week) under the Fair Labor Standards Act (FLSA).

The new rule (effective January 1, 2020) increases the salary required to meet the executive, professional and administrative exemptions to $684 per week (the equivalent of $35,568 per year). Also, the new rule increases the required compensation for highly compensated employees to $107,432. 

Misclassification

Under SB 493, there are new consequences for Nevada employers for misclassifying their employees (Note, this law was effective as of July 1, 2019). Specifically, SB 493 added additional requirements to NRS 608 that preclude Nevada employers from misclassifying their workers as Independent Contractors. 

This new law also added administrative penalties (governed by the Labor Commissioner) to Nevada employers for misclassifying their employees. It also creates a Task Force and requires various agencies to share information regarding misclassification of employees. The law also requires employers to post the new workers’ compensation posters that include the definitions of “employee” and “independent contractor,” as those terms are defined in Nevada’s workers’ compensation statutes.

Settlement Agreements (#METOO)

Nevada employers should be aware of the new legal requirements and best practices in the wake of the #MeToo movement. AB 248 became effective as of July 1, 2019, and requires that, except for limited circumstances (NRS 233.190), a settlement agreement with Nevada employers cannot include confidentiality clauses that prohibit or otherwise restrict a party from disclosing factual information related to a claim in a civil or administrative action if the claim relates to:

a) Conduct that if criminal liability were imposed, would constitute a sexual offense pursuant to NRS 179D.097 and would be punishable as a felony, regardless of whether there was a criminal investigation, prosecution or conviction of such conduct;
b) Discrimination on the basis of sex by an employer or a landlord; or
c) Retaliation by an employer or a landlord against the claimant for his or her reporting of discrimination on the basis of sex.

Any provision in a settlement agreement that restricts the disclosure of information relating to sexual harassment or gender discrimination is void and unenforceable, and Nevada courts cannot enter an order that restricts the disclosure of this type of information. Note that the claimant may request that the settlement agreement contains a provision that prohibits disclosure of the claimant’s identity (except for when a governmental agency/public officer is a party to the agreement).