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Nevada Employment Law Changes affect Overtime Pay

There have been several developments in Nevada Employment Law over the past few months concerning overtime and social media.

The Nevada Labor Commissioner board has issued two advisory options. The first of these, the Rounding Opinion, was issued in June, and pertained to whether or not rounding the clock when calculating employee pay is considered suitable under Nevada law. The Labor Commissioner changed his opinion from the one that had been expressed in an article a year ago, and now finds that it can be appropriate if it does not result in the failure to properly compensate employees for the amount actually worked over a period of time. This is based on three facts: clock rounding is allowed under federal law, other states follow said federal law, and the practice of clock rounding is not inconsistent with Nevada law.

According to the Fair Labor Standards Act, employers may use time clock rounding but only under certain circumstances. These circumstances are defined as a way that will not result in the failure to properly compensate employees for the amount of time they actually worked. Following this logic, the courts will not consider it a violation of the federal law if employers choose to use clock rounding so long as employees are still compensated for all of the time they actually worked.

He also noted that in several other states, there is no statute in place that pertains to clock rounding. Because of this, these states often refer to the FLSA for interpretations. Lastly, it was noted that the practicing of clock rounding is not inconsistent with Nevada laws, so the proper utilization will not result in a violation of the state law.

The second of these options pertains to overtime. Nevada law dictates that for hours totaling over 40/week or 8/day (whichever comes first), employers must pay employees 1.5 times the regular wage rate, if the employee is earning under 1.5 times the Nevada minimum wage as it applies. An exception for the daily requirement is made if the employer and employee agree to a 10 hour per day, 4 day per week schedule. If this occurs, there is no obligation for the employer to pay the employee the overtime rate. It is called the “4 10s” exception.

In July the Labor Comissioner stated that when an employee fails to complete a scheduled “4 10s” due to their own choices, the employer is still exempt from paying overtime. This is because many employers have been required to pay overtime in the past when an employee does not completely work all four shifts. When the law is strictly interpreted, this has led to employers paying overtime and therefore defeats the purpose of the exception. This often has a negative impact on the relationship between the employer and employee.

Therefore, the Labor Commissioner clarified that if the employee does not work the full “4 10s” because of reasons he or she could have controlled or for personal benefit, the employer is only responsible for paying the employee for his or her hours worked at the regular rate. It is key that the employee chose not to complete the “4 10s” schedule for this to apply. Otherwise, the employer must still pay overtime.