Lawsuit: Labor chief letting employers cheat workers
May 10, 2014
A complaint filed in Carson District Court charges that the labor commissioner is letting employers cheat minimum-wage workers.
The suit by lawyers Don Springmeyer and Brad Schrager of Las Vegas says the regulations implementing Nevada’s voter-approved minimum wage law illegally let those employers pay workers a dollar an hour less than they should. The action was filed on behalf of Cody Hancock and Kwok Yen Moy, two workers in Southern Nevada. It asks for a court order throwing out the offending regulations and directing the commissioner to put in new rules following the intent of the constitutional amendment.
That amendment approved in 2006 set an inflation-indexed minimum wage that is now $7.25 an hour if the employer provides health insurance to workers but $8.25 an hour if the employer doesn’t provide health insurance. That health insurance was to be no more than 10 percent of the employee’s wage.
According to the complaint, the “overriding error” in the regulations is the commissioners ruling that, “if an employee declined health insurance coverage, for whatever reason, the employer could pay the employee at the reduced minimum wage rate.”
They argued that ruling completely violated the intent of the amendment, “as the greatest fiscal advantage to the employer would be to offer but not provide employees the low-premium, comprehensive health insurance benefits mandated (by the amendment).”
At the same time, the regulations allow the employer to add tip income to the calculated wages, which in some cases sharply raised the amount workers could be made to pay for a health plan. And that, they argued, “rendered employers offering more expensive plans than the constitutional amendment contemplated eligible to pay their workers at the reduced minimum wage rate.”
“Nevada law does not permit a tip credit against minimum wage levels,” they charged.
The combination of regulations, they say, “allows employers to pay employees at the lower minimum wage rate based upon merely having offered health insurance benefit plans at calculated premium cost … higher than is permitted (by the amendment).”
In addition, the complaint says the labor commissioner maintains no list of employers eligible to pay the lower wage, collects no data on the health plans they allegedly offer and no list of employees who are or have been paid the lower rate.
The violations, they argue, are cheating thousands of minimum-wage workers in Nevada and have been for the past seven years since the amendment was passed.
It asks the court to bar the labor commissioner from enforcing the regulations and order the commissioner to implement regulations that comply with what the voters approved as part of the state Constitution.