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Bills businesses are watching

From proposed increases in the minimum wage to restrictions on non-compete agreements, Las Vegas businesses have plenty to keep tabs on in the Nevada Legislature when it comes to employment laws.

More than 120 human resources executives and in-house lawyers from casinos, corporations and small businesses got an overview of the 2017 legislative session underway in Carson City during a briefing from labor lawyers from Littler Mendelson of Las Vegas on March 24 at the MGM Grand.

Based on what’s proposed so far in the Nevada Legislature, Littler Mendelson attorney Katie Blakey said her perception is that legislators view what’s been done in previous years in Carson City hasn’t gone far enough to help workers.

“We’re just seeing this very aggressive amount of legislation coming through,” Blakey said. “And there’s a lot of bills being proposed just for the sake of being proposed.” It seems like “the goal is to make Nevada a lot like California, but I think the more conservative bills that make modest changes will probably go through.”

It starts with the proposed increases in the minimum wage led by Assembly Bill 175, sponsored by Assemblyman William McCurdy II, D-Las Vegas. It would increase the minimum wage each year so it reaches $15 an hour for employers who don’t provide health insurance and $14 an hour for those who do.

Currently, Nevada employers pay a minimum wage of $7.25 an hour if they provide insurance and $8.25 an hour if they don’t.

Senate Bill 106 would raise the minimum wage by 75 cents a year for five years or until it is $11 an hour for those who provide insurance and $12 if they don’t, Blakey said.

Blakey said there’s so much momentum for an increase in the minimum wage, given how the issue has resonated nationally, but it’s just a question of what the Nevada Legislature approves.

“I think one of them will get pushed through, because it’s so popular to raise the minimum wage right now,” Blakey said. “I can’t tell which one is the most popular at the moment.”

In McCurdy’s bill, the minimum wage would increase by $1.25 an hour and reach $15 an hour by 2022. He said nearly 300,000 Nevada workers would see a raise. He said raising the minimum wage is an important step toward bridging a “widening gap between income and opportunity inequality.” Businesses and the state’s economy, in addition to workers, would benefit, he said.

That’s not a view shared by everyone, especially many business owners and executives.

“It will hurt employers, and we do represent employers, but employees will suffer just as much,” Blakey said. “It sounds nice on paper, but when you actually put it into effect, employers don’t magically have all of this money overnight. You will see hour reductions and layoffs.”

Blakey told employers the issue won’t end with the Nevada Legislature if one of the two bills are passed and become law. In her opinion, she said, both would conflict with the current minimum wage in the Nevada Constitution.

On March 16, the Nevada Supreme Court ruled the state’s minimum wage law approved by voters via amendment in 2004 and 2006 was constitutional. Opponents said it violated federal laws. The unanimous decision was a case filed by Western Cab. Co. in a dispute with its drivers.

“The Constitution trumps out other legislation, and I think there would be a lot of litigation,” Blakey said.

Some lawmakers are recognizing that and are proposing an amendment to the Nevada Constitution to address that problem, Blakey told employers.

Senate Joint Resolution 6 proposes to amend the Nevada Constitution, which requires two elections. It would remove the health insurance component entirely, Blakey said. It would allow the Legislature to override its provisions to increase the wage rate, and it proposes a $9-an-hour minimum wage that increases by 75 cents until it reaches $12 an hour.

“I’m not sure how it would play out,” Blakey said. “It would mute the current law.”

That law would have more consequences for employers than are currently in place, Blakey said. It would entitle employees to bring actions in court individually or as class action with the goal being to void arbitration agreements, she said.

Assembly Bill 211 would mandate treble damages if an employer made a mistake and didn’t pay someone the appropriate amount.

“It’s a particular strong approach to the minimum wage, and the proposed goal is to be the same level as California and New York as wage law penalties go,” Blakey said.

There’s a proposal that employees can have up to two years to file a complaint with the Nevada Equal Rights Commission instead of the current 300 days under Assembly Bill 178, Blakey said.

In it, there’s a proposal to mandate attorney’s fees be paid, which would be an incentive for attorneys to participate, Blakey said. There would be a provision for punitive damages, a measure pulled from California. If employee records aren’t correct or missing, employers could be fined up to $5,000, she said.

Senate Bill 157 defines the workday but would allow employers to modify it with written notice, Blakey said. It would get rid of the daily overtime that’s now in place for someone who works more than eight hours a day. It also would get rid of overtime exemptions that the Nevada Supreme Court said conflicts with the Constitution, she said.

It defines a meal period as uninterrupted, but it notes that going off premises is not necessary, Blakey said.

Senate Bill 196 deals with sick leave in which employers earn one hour of paid sick leave for every 30 hours worked. Employers would be able to limit use to only 24 hours per year, and it would set out how an employee can use the time. Time would roll over, and there would be increased paperwork for employers.

“It’s a very cumbersome proposal that’s peculiar and long and takes a lot of control (from) employers and employees in how sick leave is used and distributed,” Blakey said.

Labor law attorney Patrick Hicks, founding shareholder of the Nevada office of Littler Mendelson, which represents employers, said to the extent some of the proposed legislation is passed, it would be more “burdensome” for employers.

“Nevada legislation is always a moving target,” Hicks said. “Every other year, there are proposals that come out, and most of them don’t pass. But this year there are a lot of issues that are particularly hot, like the wage and hour issues and non-compete with the litigation at the Supreme Court.”

In 2016, the Nevada Supreme Court issued an opinion giving guidance to what a non-compete agreement can look like, Blakey said.

Companies can no longer have broad language that prevents the employee from working for someone who might be a competitor.

“The Nevada Supreme Court made it clear those aren’t going to fly,” Blakey said.

An agreement has to be tailored to an employee and a specific type of job, such as a software engineer, and it must be limited, with no more than a maximum of a year or two based on the Supreme Court decision, Blakey said.

Assembly Bill 149 would limit non-compete agreements to three months, while Senate Bill 222 would limit them to one year. Senate Bill 82 would void non-competes for start-ups and increase the maximum fine for the wrongful acquisition of trade secrets, Blakey said.

Prior to the Nevada Supreme Court decision, Hicks said, courts would blue-pencil the agreements — essentially rewrite them. Courts would not be consistent, with some judges viewing them as legitimate and others viewing them as overly restrictive.

It’s an issue of growing relevance in Nevada that impacts not only larger employers such as casinos, but also a variety of industries from software to doctors’ offices, Hicks said.

“Anywhere where there’s customers and lists,” Hicks said. “It could be in the home insulation industry, where the person knows a lot of customers and their preferences and buying tendencies. That’s valuable information to take.”

When companies are looking to hire someone, they ask about these agreements and try to get the person out of them, Hicks said.

“Nobody wants to hire a lawsuit with it,” Hicks said.

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