Nevada still leads the nation in unemployment. Shuttered buildings and struggling businesses are everywhere. Policymakers claim to be searching high and low to find ways to get the economy back on track and put people back to work.
Even as meaningful recovery has escaped the Silver State, we still are suffering the effects of some of the ways in which we shot ourselves in the foot during the boom years.
One such area is Nevada’s minimum wage law. When times were good and everyone was working the public jumped on board. But now the gravy train has come to a screeching halt it represents a roadblock to business growth, employment growth and economic recovery.
Not only does it require a minimum wage above the national rate it contains other elements that make it even worse, including a provision called the “24-hour rule”.
Federal law requires most employees to be paid 1-1/2 times their normal rate whenever they work overtime, which is defined as more than 40 hours in a week. Nevada’s minimum wage law expands the definition of overtime for many workers from 40 hours in a week to 8 hours in a day.
The 24-hour rule requires that anyone who makes less than 1-1/2 times the minimum wage must be paid overtime whenever that person works more than 8 hours in any 24-hour period, unless it’s part of a 4-day, 10-hour workweek schedule. With Nevada’s increased minimum wage this could include people making as much as $12.37 per hour.
For instance, say Sally works from noon to 8 pm one day. The next day, Jim calls in sick so the manager calls Sally to start work at 8 am. The four hours Sally works from 8 am to noon would all be considered overtime and paid at time-and-a-half.
Furthermore, it is based only upon an employee’s wages. Nevada’s service industries include many workers – such as bartenders, waitresses, valet parking attendants and others – who are paid at a low hourly rate but who can make significant additional income in tips. Even though this tip income can be three or four (or even more) times their wages, it does not affect their eligibility for the 24-hour rule.
The 24-hour rule has hit restaurants and bars particularly hard. These are mostly low-margin businesses who can’t afford to pay their employees a high hourly rate. What these workers don’t make in wages they can easily make up for in tips, and then some. But those tips don’t count as far as the 24-hour rule is concerned.
These businesses can’t afford to hire extra people just to have available in case of someone calling in sick or not showing up. They normally have only enough staff to fill all their shifts so when they have to cover for an employee they almost always are forced into the position of paying someone overtime.
Workers are some of the biggest critics of the law. At times when tips are exceptionally good they will often lobby to work extra time or will try to trade shifts with co-workers to attend to personal matters. But, faced with the prospect of having to pay overtime, it can be prohibitively expensive for their employer to accommodate these requests.
Hundreds of bars and restaurants have closed in the last few years, with such popular eateries as Rosemary’s and Ruth’s Chris shutting their doors recently. We need to find ways to remove unnecessary burdens on businesses like these, such as the 24-hour rule.
There have been attempts to amend this provision, including at the Legislature. But these efforts have run into opposition from the unions, which usually spells certain death in the Nevada Legislature. Even though union workers are exempt from this and many other provisions of the state’s minimum wage law, unions emerge in full-throated opposition to any attempts to change them.
The Silver State is still suffering a hangover from the excesses of the economic boom. Purging ourselves of some of those that remain, such as the 24-hour rule, would be a good start to aiding a recovery and ensuring a brighter future.
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