Nevada urged to fix minimum wage loopholes

CARSON CITY — A Las Vegas attorney on Friday asked the state labor commissioner to fix what he called loopholes in the state’s minimum wage regulations that have resulted in workers being cheated out of either a higher wage or health insurance.

Bradley Schrager testified at a public hearing that many employers who pay their workers $1 less an hour in exchange for offering health insurance have skirted the rules.

Employers, who are allowed to pay $7.25 an hour instead of $8.25 an hour if they provide insurance, are offering plans that don’t even qualify as health care coverage, he said. Others discourage workers from seeking health care coverage or charge more for a plan than the law allows, Schrager said.

The result has been that Nevada minimum wage workers have been paid “hundreds of millions” of dollars less in wages than is appropriate, he said.

Many of the employers paying the lower wage are based outside Nevada as well, meaning the unpaid wages did not make it into the local economy, Schrager said.

James Nelson, representing the Nevada Association of Employers, said the rules are ambiguous and need clarification.

“Employers just want to know what the right thing to do is,” he said.

Brian McAnallen, vice president of government affairs for the Las Vegas Metro Chamber of Commerce, said the issue is critical for its members.

A $1 increase in the minimum wage can affect a business significantly, he said. This, along with the business margins tax on the November ballot and other threats from Washington, D.C., could jeopardize the thin profit margins that exist now for many businesses, he said.

But Schrager said the issue is ensuring the current law is followed.

“We’re not dealing with an increase in the minimum wage,” he said. “We’re dealing with compliance with the existing minimum wage law. The faithful implementation of it.”

Regulations adopted by a former labor commissioner in 2007 to enact Nevada’s minimum wage law as approved by voters in 2006 are “plagued with clearly unlawful gaps, exceptions and loopholes,” Schrager said.

“This demands swift correction,” he said.

Schrager has filed class action lawsuits against several employers, including Wendy’s and Denny’s restaurants, seeking back wages for their minimum wage employees.

The hearing was conducted by Labor Commissioner Thoran Towler from the capital and teleconferenced to Las Vegas. He noted that since many of the minimum wage rules were voter-approved and in the state constitution, he has no authority to make changes that would conflict with those provisions.

Towler said he wants those interested in the issue to submit written comments by Aug. 29 on how the rules could be clarified under the guidelines established in the state constitution.

All comments will be made public for review by stakeholders, he said.

Contact Capital Bureau reporter Sean Whaley at swhaley@reviewjournal.com or 775-687-3900. Find him on Twitter: @seanw801.