Most will dodge coming wage boost

Most employers in the Silver State can ignore the increase in federal minimum wages next week, according to Nevada’s labor commissioner.

That’s because the minimum wage that applies to most Nevada workers will not change Tuesday as a result of the federal minimum wage boost, said Labor Commissioner Michael Tanchek.

Because of a Nevada constitutional amendment that was adopted in November, the state’s minimum wage increased this month to $6.33, which is already higher than the $5.85 an hour federal minimum wage that will go into effect next week.

Nevada will not alter its minimum wage until next summer, Tanchek said.

At that time, the Nevada minimum wage probably will reach $7.03, the current minimum wage plus the 70-cent increase in the federal minimum wage that will take effect next July 1.

During the election campaign on minimum wages, Nevadans were told that the change would keep Nevada’s minimum wage $1 higher than the federal minimum wage. That was an oversimplication and not true, analysts said.

Nevada’s minimum wage could be raised to reflect a change in the cost of living, but any cost of living adjustment cannot exceed 3 percent and therefore would be less than 70 cents, Tanchek said.

While the federal minimum wage change won’t affect most minimum wage workers, a few minimum wage workers will get an immediate benefit.

Those are minimum wage employees who now receive only $5.30 an hour, which is less than the standard minimum wage because their employer provides health insurance benefits for them. The minimum wage for these workers will climb to $5.85 a hour, the federal standard.

"Nevada businesses not only have to comply with the state Department of Labor law but also with the federal Department of Labor law," said Paul Hartgen, chief executive officer of the Nevada Restaurant Association.

Restaurant owners are feeling a financial pinch because of several factors. In addition to higher minimum wages, the public has fewer discretionary dollars for dining out because of higher mortgage interest rates and higher prices for gasoline, Hartgen said.

"It’s too early to tell" if any restaurants will fail because of the increased wage costs and decreasing consumer spending on eating out, Hartgen said.

While minimum wages remain a hot issue for some, "most employers just want to get it right," said Swen Prior, an attorney with Snell & Wilmer who focuses on labor and employment law.

He recommends that employers keep good records, particularly if they are paying the lower minimum wage.

"Make sure you document it and the reason why," Prior said.

In a related development, Tanchek advised employers that the change in the state minimum wage on July 1 raised the number of workers who are entitled to overtime pay for working more than eight hours in any one day.

"There is a lot of confusion about this issue," Prior said.

Workers who make less than 1 1/2 times the minimum wage must be compensated at overtime rates if they toil more than eight hours on any work day, regardless of how many hours they work on other days during the week.

In other words, companies must pay overtime for more than eight hours daily if the worker earns less than $9.50 per hour.