The Magical Forest is a fundraiser for Opportunity Village, which is one of several Nevada nonprofit organizations that might be affected by the state's minimum wage increase. REVIEW-JOURNAL FILES

Several Nevada nonprofit organizations received grim news Friday that could affect their ability to offer jobs to disabled people.

Labor Commissioner Michael Tanchek told representatives of the nonprofits that he sees no way to exempt them from a new minimum wage law that took effect last month.

"This is an unintended consequence of the (minimum wage) amendment, and I think it's a very bad thing," he said during a special informational workshop in Carson City. "This really, really bothers me."

Organizations including Southern Nevada's Opportunity Village and Easter Seals previously have been allowed to pay disabled clients based on the amount of work they can perform in an hour, called piece-work, instead of a set wage. The recent voter-approved boost in the minimum wage, which raises it to $6.15 an hour for employers who don't provide health insurance, makes no exemption for piece-work.

Ed Guthrie, Opportunity Village's executive director, said he hoped to be granted an exemption based on the fact that the organization's disabled workers are not considered employees by the Internal Revenue Service.

But Tanchek said he sees no way around the new Nevada law, other than through another voter-approved constitutional amendment.

"I think we're stuck with it," he said. "It's a real mess."

Opportunity Village provides vocational training, jobs and social interaction for thousands of local residents with intellectual disabilities.

Hundreds of Opportunity Village's clients perform manual labor such as packaging sweeteners and non-dairy creamer packets for use in casinos. Many go from the training center to jobs in the community that pay more than minimum wage.

"Those who work cleaning offices or as restroom attendants at McCarran (International Airport) already make more than minimum wage," Guthrie said.

The new wage could apply to nearly 400 of Opportunity Village's clients, including those who work at the organization's thrift stores. It would cost the organization an extra $1.7 million more a year to pay them the minimum wage, Guthrie said.

Other agencies that could be affected by the new law include High Sierra Industries in Reno, Fallon Industries and Washoe Arc, formerly known as the Washoe Association for Retarded Citizens.

While Guthrie still hopes the nonprofits will receive an exemption, he said Opportunity Village is setting aside money in case it has to meet the higher wage. But he's worried about other groups that might not be able to absorb the increase.

"I don't know what we're going to do" if forced to pay minimum wage, said Brian Patchett, chief executive of Easter Seals of Southern Nevada.

Easter Seals also works with people with disabilities and includes a job training center. The new minimum wage would affect 150 to 200 workers at the center who perform tasks such as packaging perfumes and putting together packets for events.

"It's going to end up costing a lot more money or we're not going to be able to provide these programs in the same way," Patchett said. "Somebody's going to have to meet those costs."

He added that he supports the minimum wage increase, but "there needs to be an exemption for people in very specific programs who have serious disabilities."

Danny Thompson, executive secretary and treasurer of the Nevada AFL-CIO, which backed the minimum wage increase, did not return a call seeking comment Friday.

Both Patchett and Guthrie said they may have to challenge the new law in court, but hoped it won't come to that.

"I think that's where we're heading," Patchett said. "My guess is probably the group (of nonprofits) will all get together and file something."

While many of the affected workers make very little, Guthrie said, some less than 20 percent of minimum wage, the money helps them a lot.

"Many of these people live with family ... on a fixed income," he said. "Even if you only make $50 a week, it helps pay for heat, air conditioning, puts groceries on the table or even pays just to go to a movie."

He said if forced to pay the workers minimum wage from now on, Opportunity Village might have to "seriously retool" its employment program, possibly by cutting workers' hours.