Remember when I told you back in March 2019 that everybody is getting a raise and that your business has to pay for it? To refresh your recollection, you can read that article here. Well, that time is right around the corner. Specifically, effective July 1st, 2020, Nevada employers are required to pay a higher minimum wage.
AB 459 from the 2019 Legislative Session increased the minimum wage. The provisions of that law go into effect on July 1, 2020 and, as such minimum wage will now be increased to $8.00 and $9.00 (depending on if you provide qualified health insurance).
The cost to your business does not stop there. Consider that you have to pay increased amounts to the federal government for employee withholding tax. Unemployment and workers’ compensation rates are based upon your gross payroll, so those are going up as well. Furthermore, if you pay the Nevada Modified Business Tax, that is also based upon gross payroll. That cost will increase accordingly.
Just when you thought it could not hurt you any further, there is an additional treat (or trick, depending on your perspective) included in AB 456. The bill allows for an employee who is not properly paid to bring a lawsuit against the employer. If the employee wins that lawsuit, the employee is entitled to back pay, damages and his/her attorneys’ fees and costs. If you read between the lines, this means that lawyers will get the biggest raise of all.
Across the country, lawyers have been aggressively bringing cases against employers (primarily those who have tipped employees) for failing to satisfy the minimum wage. In another wave of lawsuits, aggressive lawyers have been bringing claims against those businesses that retain talent through independent contractor agreements, arguing that those agreements are not valid and the businesses have violated wage laws (like minimum wage).
Gordon Law has written extensively about the merits of independent contractor agreements and the safest ways to implement them. I encourage you to take a look through our blog archive to review them. I further urge you to closely follow how the federal and state government actions are changing your business’ requirements and reach out to Gordon Law to ensure that you are complying.
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