The Nevada Supreme Court, in an opinion issued this week, has unanimously defined what health benefits an employer must provide to qualify for a lower minimum wage.
Under the minimum wage amendment to the state constitution, businesses that provide workers health benefits can pay workers a dollar less than those who don’t provide benefits. At present, that’s $7.25 instead of $8.25.
According to the opinion authored by Justice Kris Pickering, the amendment, “requires an employer who pays one dollar per hour less in wages to provide a benefit in the form of health insurance at least equivalent to the one dollar per hour in wages that the employee would otherwise receive.”
Under that reasoning, the high court ruled the amendment was designed to make health insurance available to workers and their dependents “at a total cost to the employee for premiums not more than 10 percent of the employee’s gross taxable income.”
The opinion grants a writ of mandamus directing the district court to vacate its decision granting partial summary judgment to the employees who sued MDC Restaurants and to hold hearings to determine whether the health plans offered workers meet the requirements of the amendment.
The opinion rejects MDC’s argument the decision should be up to the Nevada Labor commissioner whether different health plans qualify for the lower minimum wage.
“This case requires interpretation of the (amendment), which is a responsibility that we cannot abdicate to an agency,” the opinion states.
For purposes of this case, the opinion states, “the simplest and most straightforward meaning of ‘health benefits’ is a benefit in the form of health insurance at least equivalent to an additional one dollar per hour in wages.”
The opinion concludes an employer who pays the lower minimum wage has the burden of proving they offer health insurance, “at a cost to the employer of the equivalent of at least an additional dollar per hour in wages and at a cost to the employee of no more than 10 percent of the employee’s gross taxable income from the employer.”
A number of employees of different Nevada business have charged over the years employers pay the lower wage by simply offering health plans that are far too expensive for minimum wage workers to purchase, thereby escaping the requirement.