State wants suit against Labor Commission dismissed

The state has filed a motion to dismiss a lawsuit accusing the Labor Commissioner of letting employers cheat minimum wage workers.

The suit filed June 6 by Las Vegas lawyers Don Springmeyer and Bradley Schrager says the regulations implementing Nevada’s minimum wage illegally allow employers to pay those workers a dollar less per hour than they should. It asks that the court order the regulations rewritten to comply with the voter-approved amendment.

But the state, in its response, charged the plaintiffs, Cody Hancock and Kwok Yen Moy, haven’t exhausted the administrative remedies that are required before seeking judicial relief. Therefore, the Attorney General’s Office argued, the district court in Carson City has no jurisdiction and the complaint must be dismissed.

The constitutional amendment approved in 2006 indexed Nevada’s minimum wage to the rate of inflation. It’s currently $7.25 an hour for employers who provide health insurance costing less than 10 percent of an employee’s wage. If the employer doesn’t provide that coverage, the minimum wage is $8.25.

But the complaint says the regulations adopted by the Labor Commission state that, “if an employee declined health coverage for whatever reason, the employer could pay the employee at the reduced minimum wage rate.”

Springmeyer and Schrager argue that violates the intent of the amendment since “the greatest fiscal advantage to the employer would be to offer but not provide employees the low-premium, comprehensive health insurance benefits mandated.”

The regulations also allow the employer to add tip income to the calculated wages, sharply raising the 10 percent amount workers could be made to pay for health benefits.

“Nevada law does not permit a tip credit against minimum wage levels,” their suit states.

The combination, they argue, allows “employers to pay employees at the lower minimum wage rate based upon merely having offered health insurance benefit plans at calculated premium cost levels higher than is permitted.”

Finally, they say the Labor Commissioner doesn’t maintain a list of employers eligible to pay the lower wage and collects no data on the health plans they allegedly offer.

The result, they argue, is cheating thousands of minimum wage workers.

But the Attorney General says the issue isn’t ready for a court to decide because Schrager and Springmeyer didn’t offer a clear explanation of why the regulations violate the constitution in their letter to the commissioner calling for a rewrite of the rules.

The court has not yet acted on the motion to dismiss the case.