One thing that makes Nevada unique (in the wage and hour world), is our tiered minimum wage. We have one wage for employees that are offered qualifying benefits and another, slightly higher wage, for those that are NOT offered medical benefits. We had these wages in place for many years, without really knowing what was meant by “qualifying health benefits.” This issue was addressed in our last legislative session.

Nevada passed Senate Bill 192 (SB192) in May 2019 adding a new section to NRS 608. NRS 608.258 provides guidelines describing what coverages qualify to allow the lower tier minimum wage to be paid.  

Here are the requirements:

The plan must be available to the employee and dependents and include these services:

  • Ambulatory patient services
  • Emergency service
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance use disorder services (including without limitation behavioral health treatment)
  • Prescription drugs
  • Rehabilitative and habilitative services and devices
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services (not required to include oral and vision care)
  • “Any other health care service or coverage level required to be included in an individual or group health benefit plan pursuant to any applicable provision of title 57 of NRS, which includes the substantive requirements of NRS Chapters 689A and 689B.”

NRS 608.258 further states that an employer “does not provide health benefits … if the employer makes available to the employee and the employee’s dependents a hospital-indemnity insurance plan or fixed-indemnity insurance plan unless the employer separately makes available to the employee and the employee’s dependents at least one health benefit plan that complies” with the above.

Interpretation of the health care provisions of Nevada’s Minimum Wage Amendment has been an on-going struggle. In 2018, the Nevada Supreme Court determined that employers who want to pay an employee the lower-tier minimum wage must provide health insurance at least equivalent to the $1 per hour that the employee would otherwise receive.

The Minimum Wage Amendment (“MWA”) was enacted following voter ballot initiatives in 2004 and 2006 (titled “The Raise the Minimum Wage for Working Nevadans Act”). The MWA established a two-tier minimum wage in Nevada. The lower-tier minimum wage is equal to the federal minimum wage and applies if an employer offers qualifying health benefits. Otherwise, the higher-tier minimum wage applies.

The only definition of what constitutes health benefits in the MWA is a provision that states that for the lower-tier minimum wage to apply the health benefits can cost no more than 10% of the employee’s gross taxable income from the employer.

As of July 1, 2020, the minimum wage, with benefits offered, is $8 per hour, and without, $9 per hour. With minimum wage on the rise, it’s a good time to make sure your plan is in compliance.