When it comes to employment and wage regulations, understanding the specific overtime laws of a state is essential. Nevada Labor Laws govern various aspects of employment, including overtime pay. Nevada’s overtime laws ensure that employees are fairly compensated for their additional hours of work beyond the standard 40-hour workweek.
This article will provide information to successfully navigate Nevada’s overtime regulations, whether you’re an employer aiming for compliance or an employee defending your rights.
This article covers:
- Nevada Overtime Rates
- Overtime Entitlement in Nevada
- Overtime for Tipped Employees in Nevada
- Overtime for Salaried Employees in Nevada
- Calculating Overtime with Commission in Nevada
- Overtime Exceptions and Exemptions in Nevada
- Statute of Limitations For Unpaid Overtime Claims in Nevada
- Penalties for Misclassifying Employees in Nevada
- Legal Cases Relating To Overtime Compensation in Nevada
In Nevada, employees must be paid an overtime rate of 1.5 times their regular pay rate, for any overtime hours worked. The terms of the overtime rate are different depending on the wage an employee earns.
The minimum wage for employees in Nevada is $10.25 (health insurance included) and $11.25 (health insurance not included). This means that the overtime rate would be $15.38 for employees with health benefits and $16.88 for employees without health benefits. In Nevada, overtime is calculated for;
- Any hours worked over 8 hours in a day (daily overtime)
- Any hours worked over 40 hours in a workweek (weekly overtime)
Employees who earn more than the abovementioned rates are eligible for overtime pay at a rate of time-and-a-half for hours worked over 40 hours in a workweek only.
According to Nevada overtime laws, overtime pay is required for any non-exempt employees.
Employees in non-exempt industries who make less than $684 per week ($35,568 annually) are entitled to overtime compensation.
However, an employee’s overall eligibility for overtime pay is based on job duties or business they are involved in.
Read more about Overtime Exceptions and Exemptions in Nevada.
The overtime rate for tipped employees is 1.5 times their regular wage for every overtime hour worked. It is important to note that tipped employees in Nevada are subject to a lower minimum wage per hour instead of the regular state minimum wage.
The use of a “tip credit” system, which allows employers to pay tipped employees a reduced minimum wage, is permitted by both state and federal legislation. However, a tipped worker must accumulate enough tips to total up to the regular state minimum wage. If their wage, including tips earned, falls below the regular minimum wage, their employer must make up the difference.
That being said, an employer cannot include that tip credit in the calculation of overtime pay. This means that the entire minimum wage (following the Nevada minimum wage) must be taken into account when calculating overtime pay.
In Nevada, only certain salaried employees have the right to receive overtime pay. A salaried employee is an individual who receives a predetermined salary, regardless of the actual hours worked. This means that even if they work more than the hours their salary compensates for, they are still entitled to additional compensation for their extra hours.
To determine a salaried employee’s overtime rate, an employer must first determine their employee’s hourly rate by dividing the salary by the number of hours that salary compensates for.
Then, take the hourly pay rate to calculate the overtime rate for salaried employees using the following formula:
Hourly pay rate x Overtime Hours x Overtime Rate (1.5)
It is important to note that if an employee’s salary covers less than 40 (hours) in a workweek, their regular rate will be added for every subsequent hour working up to the 40. Only after 40 hours will time-and-a-half be counted.
If an employee’s salary covers 40 (hours) in a workweek, then time-and-a-half will be paid for any hours over 40.
In Nevada, employees who may receive commissions are still entitled to overtime pay although the rate may differ.
If an employee receives weekly commissions, the commission will be combined with the employee’s weekly wage to get the total earning for the week. The amount is then divided by the total number of hours worked in the week to determine the regular hourly rate for that week. For any hours worked beyond 40 per week, the employee must be paid additional compensation at a rate of half of the regular hourly rate.
For example, let’s say an employee works 45 hours a week at a rate of $10.25/hour (Nevada minimum wage with health insurance included) and receives $50 in commissions for that week.
(Total hours x Hourly Rate) + Commission
= (45 x 10.25) + 50
= $511.25 (total earnings for the week)
Then, divide that by the total hours worked in the week.
= 511.25 / 45
=$11.36 (new regular hourly rate)
To determine the overtime rate for the commissioned employees, we need to take that new regular hourly rate and halve it.
$11.36 / 2
Since the employee worked an extra 5 hours in the week, that makes his overtime compensation $28.40 ($5.68 x 5 hours).
The amount will vary according to the hours worked, hourly rate, and commission earned.
In Nevada, employees in white-collar positions who earn a minimum of $648 per week are not eligible for overtime compensation. White-collar employees fall under four categories which are outside sales, administrative, executives, and professional workers.
Nevada also exempts other professions from receiving overtime compensation, such as:
- Outside buyers
- Independent contractors
- Employees covered by a collective bargaining agreement — provided it contains different overtime requirements
- Employees in retail or service industries, provided they earn at least 1.5 times the standard minimum wage and that more than half of their compensation comes from commissions
- Drivers, driver’s helpers, loaders, and mechanics working for motor companies who are subject to the federal Motor Carrier Act
- Railroad employees
- Air carriers’ employees
- Drivers and drivers’ helpers making local deliveries — provided they are paid on a trip basis (or other regulated delivery plan)
- Taxicab and limousine drivers
- Agricultural employees
- Mechanics and salespeople primarily engaged in selling or servicing automobiles, trucks, and farm equipment
- Employees working for businesses whose annual sales are less than $250,000 per year
- Domestic workers who reside in the household where they work — provided both parties agree in writing that the employee is exempt from overtime pay
In Nevada, the statute of limitations for an employee to recover unpaid overtime wages is two years from the date of the violation. For example, an employee who files a lawsuit today can seek the recovery of overtime back wages for only the previous two years. This statute of limitations can be extended to three years if an employer has willfully or knowingly violated overtime regulations.
In Nevada, an employer who misclassifies an employee as an independent contractor is inadvertently affecting their overtime eligibility. However, some employers willfully misclassify employees to avoid providing additional compensation.
Administrative penalties may be imposed against an employer who misclassified an employee:
- For an unintentional first-time offense, a warning may be issued to the employer by the Labor Commissioner.
- For a willful first-time offense, a fine of $2,500 may be imposed.
- For a second or subsequent offense, a $5,000 fine for each misclassified employee may be imposed.
It is important to note that the Labor Commissioner must provide prior notice or opportunity for a hearing to an employer.
Below, we present law cases relating to fair overtime compensation for employees in Nevada:
1. Officers of the City of Henderson Seek Back Wages for Overtime Work Hours Required by Employer
In the case of Woodburn v. City of Henderson, corrections officers Kelly and Thomas Woodburn filed a lawsuit against the City of Henderson (the “City”) on behalf of themselves and other similarly situated employees who were required to work unpaid overtime.
The Woodburns provided details about their work schedules, hours worked, and pay rates during their employment. They further alleged that they were required to work unpaid overtime before and after their regular shifts, which amounted to approximately 60 minutes of unpaid overtime for Kelly and 45 minutes for Thomas on each shift. During those times, the Woodburns needed to change into and out of their uniforms, check their schedules, brief other officers, and either collect or lock up their vehicle or firearms supplies. The Woodburns claimed that this deprived them of thousands of dollars in overtime.
The Woodburns filed for a class action to include all existing or former City employees who were denied overtime pay. The City sought to dismiss the claim. They argued that the allegations were insufficient to allege a Fair Labor Standards Act (FLSA) violation. Additionally, the City also sought to strike any allegations that involved existing employees under the mandatory arbitration clause that precluded their participation in the lawsuit.
The court denied the City’s motion to dismiss. It was found that the Woodburns had met the standard for claiming an FLSA violation. Regarding the City’s motion to strike the allegations, the court stated that it was premature to address this argument and therefore denied the motion to strike.
The details for the proceedings of this case were not provided.
Key lessons from this case:
- Time spent on pre-shift and post-shift tasks can be considered compensable working time and may contribute to unpaid overtime.
- Employees can file lawsuits on behalf of other similarly situated employees provided that enough evidence is shown.
- While detailed factual pleading is not explicitly required, providing comprehensive details about specific workweeks, hours worked, pay rates, and overtime hours can strengthen the FLSA claim.
2. Wal-Mart Employees Owed Overtime Compensation for Tasks Performed Before Clocking In
In the case of Nelson v. Wal-Mart Associates, Inc., Christopher Nelson, along with other similarly situated individuals, filed a lawsuit against Wal-Mart Associates (Wal-Mart) for alleged failure to pay employees for their overtime. Nelson, a non-exempt hourly employee, worked at Wal-Mart’s food distribution warehouse. He claimed that employees in both the “Dry” and “Cold” sections of the warehouse were required to perform certain tasks before their shifts but were not allowed to clock in until right before their shifts. Nelson argued that these tasks were integral to their job and should be compensated for.
Dry Section employees were required to check out and bring back a mobile scanner and printer from the system control window, which took around 15 minutes. Nelson asserted that these devices were essential for labeling and taking inventory and that the time spent on these activities amount to around one hour per workweek. In the Cold Section, employees were required to put on personal protective equipment (PPE) before their shifts began. Nelson claimed that the process of putting on the PPE took about 15 minutes per shift.
Wal-Mart filed a motion to dismiss this case under the Minimum Wage Amendment (MWA) of the Nevada Constitution because Nelson’s hourly rate does not fall below the state minimum. Nelson countered by stating that he did not receive any compensation for their pre-shift activities and that Wal-Mart’s argument was incorrectly premised on Nevada’s “workweek requirement” for calculating the minimum wage.
The court rejected Wal-Mart’s argument. The court used a predictive approach to determine that the minimum wage calculation did not apply and that Nelson’s claims were still valid.
Key lessons from this case:
- Employers can face legal action if they fail to compensate employees for pre-shift activities that are necessary for performing their job duties effectively.
- Employers must consider both federal and state labor laws when determining overtime pay requirements, as they may differ in certain aspects, such as the calculation of minimum wage.
- Employers should carefully consider the time spent on tasks that are essential for employees to effectively perform their job duties. Even if the time spent on these activities seems minimal, if they cumulatively add up to a substantial amount over a workweek, employees may be entitled to overtime compensation.
3. Former Employee Seeks Unpaid Overtime Wages Despite Signing a Severance Agreement
In the case of Zako v. Hamilton Company, James Zako filed a collective action lawsuit against Hamilton Company under the Fair Labor Standards Act (FLSA) for denying overtime pay. Zako worked as a field service specialist for Hamilton Company, providing installation, maintenance, and repair services for laboratory products. Zako claimed that he regularly worked more than 40 hours a week without receiving overtime pay.
Zako resigned from his job and entered a severance agreement with Hamilton Company on that same day, The agreement included a waiver of claims, which released Hamilton Company from liability for all claims arising out of Zako’s employment. The agreement also prohibited Zako from disclosing confidential information, soliciting customers or employees, and assisting with third-party disputes against Hamilton Company.
Hamilton Company argued that Zako’s claims were barred by the severance agreement and decided to file a motion to dismiss his claims. The court noted that the severance agreement explicitly released Hamilton Company from liability for all claims related to his employment. The agreement also prohibited Zako from partaking in third-party claims against them, such as this collective action lawsuit.
Zako argued that his right to bring a collective action under the FLSA was non-waivable but the court rejected this argument, stating that contract provisions that waive rights under the FLSA are enforceable. Ultimately, Zako’s claims were dismissed with prejudice.
Key lessons from this case:
- Severance agreements in Nevada can include provisions that release employers from liability for claims related to employment, including overtime violations.
- It is important for an employee to carefully review and understand the terms of an agreement before signing them to avoid misunderstanding their rights.
- While substantive rights under the FLSA cannot be waived through a contract, procedural rights can be waived. This means that employees can potentially waive their right to file a collective action lawsuit by signing a severance agreement.
Learn more about Nevada Labor Laws through our detailed guide.
Important Cautionary Note
When making this article we have tried to make it accurate but we do not give any guarantee that the information provided is correct or up-to-date. We therefore strongly advise you seek advice from qualified professionals before acting on any information provided in this article. We do not accept any liability for any damages or risks incurred for use of this article.