Don’t let hindsight be 2020. While others are enjoying the holidays and a well-deserved break, Nevada businesses should “check their lists twice” to make sure they are compliant with a host of new laws going into effect in Nevada on January 1, 2020.
Here are some new laws to be aware of:
Pre-Employment Marijuana Drug Screening – AB 132
With certain exceptions, Nevada employers, will be prohibited from refusing to hire prospective employees based on results of a pre-employment marijuana screening. In addition, new hires subjected to a drug test within the first 30 days of employment have the right to submit an additional screening test, at their own expense, to rebut the positive results of an initial screening.
This new law is intended to fill the gap in certain employment practices created by Nevada’s legalization of marijuana for recreational and medical use not previously addressed under Nevada law.
However, several provisions of this law remain unclear. For example, under the new law, “in the determination of the employer, [positive indication of marijuana use] could adversely affect the safety of others.” Similarly, the law provides that Nevada employers “shall accept and give appropriate considerations to the results” of a secondary test where the employee submits a second screening at their expense. These two broadly-worded provisions suggest that there will be further clarification—through the courts or the Nevada Legislature—in the future.
To comply with this new law, Nevada employers should consider reviewing the following: drug testing policies; pre-employment procedures; employment contracts; and job classifications. Nevada employers should also consider training human resources personnel to adapt to these new requirements.
Paid Leave – SB 312
Nevada private sector employers with 50 or more employees are now required to provide their employees with up to 40 hours of paid leave per benefit year. Employers subjected to this requirement must now provide each employee with “at least 0.01923 hours of paid leave for each hour of work performed” in a “benefit year,” defined as a “365-day period.” In easier terms, this statutory formula equates to 40 hours of paid leave for an employee who works 40 hours a week for a full year.
Originally coined the “sick leave” bill, the law, as enrolled, allows employees to take paid leave without providing a reason for their leave, as long as employees provide their employer with notice of intent to use their paid leave “as soon as practicable.” Under the new paid leave law, effective January 1, 2020, employers are permitted to require employees using paid leave to use at least 4 hours of their accrued time. Employers are also prohibited from retaliating against employees who use their paid leave.
Private employers with more than 50 employees should take immediate action to ensure compliance. First, employers should determine their preferred accrual of paid leave (frontloading vs. accrual method). Next, employers should ensure that they maintain adequate records of accrued and used paid leave. Finally, employers should determine best practices for paying out unused paid leave upon separation of employment.
Employers with questions regarding implementation should review the Nevada Labor Commissioner’s advisory opinion for more information.
Empowering the Nevada Equal Rights Commission – SB 166
Nevada’s employment discrimination laws are facing substantial changes in the new year. Under current law, the Nevada Equal Rights Commission has the ability to order an employer engaging in unlawful discriminatory practices to cease and desist and/or restore all benefits and rights of the complainant including, but not limited to, rehiring, back pay, leave, other fringe benefits and seniority with interest. The new 2020 law enables the Commission to do the following:
- Award up to two years of back pay that would have been earned by an employee if their employer is found to have discriminated on the basis of sex; and
- Assess a civil fine on employers of 50 or more employees who have willfully engaged in an unlawful employment practice.
Importantly, employers who have been assessed fines by the Commission have 30 days from the date of service of the order issued imposing such fines to take corrective action before the fine is imposed.
Employers should consider reviewing their employment practices to ensure they are compliant with both Nevada and federal employment discrimination laws.
Occupational Safety and Health Administration Registry – AB 290
This law requires the Division of Industrial Relations, Department of Business and Industry, to create a public Occupational Safety and Health Administration (OSHA) online registry to track whether construction workers, supervisors, and other employees have completed required OSHA safety and health hazard courses and to also track those who are authorized to offer the training courses. The Division must publish the list of those who have completed the required courses, so employers can verify completion.
This innovative, proactive approach should benefit employers and employees. Employers will be able to verify that their employees have completed mandatory training beginning Jan. 1. Employees may benefit from increased safety that should result from preventing bad actors from obtaining fraudulent OSHA cards.
While this law is relatively straightforward, there are gaps in the law that will make verifying whether certain employees have completed the required coursework difficult. For instance, employees who completed coursework prior to Jan. 1, as well as those who completed and/or will complete OSHA training in other states, will not be included on the registry for now. Employers should be mindful of these exceptions when reviewing whether employees are compliant under Nevada law.
Minimum Wage Health Benefit Standard – SB 192
The Constitution of the State of Nevada contains a two-tiered minimum wage based on whether an employer offers “qualifying health benefits” to its employees. Under the current minimum wage laws, employers offering qualifying health benefits can pay a minimum wage of $7.25, while those not offering qualifying health benefits must pay a minimum wage of $8.25. SB 192 defines the following “health benefits” which must be included in a benefits package to qualify for paying employees the lower-tier minimum wage:
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services, including, without limitation, behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, which are not required to include oral and vision care and
- Any other health care service or coverage level required to be included in an individual or group health benefit plan pursuant to any applicable provision of title 57 of NRS, which includes the substantive requirements of NRS §§ 689A and 689B.
In addition, the level of coverage provided must be either (1) equivalent to 60% of the full actuarial value of the benefits provided under the plan, or (2) employers may also offer Taft-Hartley Trust Funds formed pursuant to 29 U.S.C. § 186(c)(5), qualifying as an employee welfare benefit plan under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§1001 et seq. or the Internal Revenue Code.
Employers should consider taking several affirmative steps to ensure compliance by doing the following: (1) review offered health insurance benefits; (2) review minimum wage rates paid to employees; (3) update payroll procedures; and (4) review the rising minimum wage under Assembly Bill 456, effective July 1, 2020.
While AB 456—raising Nevada’s minimum wages over the next four years—does not go into effect until July 1, employers reviewing their compliance under SB 192 should consider doubling-down by projecting how their payroll will be altered in the near future as follows:
Apprenticeship Requirements – SB 207
The Apprenticeship Utilization Act, enacted by SB 207, creates new apprenticeship requirements for contractors bidding on Nevada public works for projects over $1 million. Contractors and subcontractors engaged in vertical construction on these projects must use at least one apprentice for 10% of the total labor hours worked for each craft when more than three workers are employed in that type of labor. Similarly, contractors and subcontractors must use at least one apprentice for 3% of total hours of labor worked for each craft when more than three workers are employed in that type of labor.
These requirements are just the tip of the iceberg. The Nevada Legislature granted further powers to the Labor Commissioner to increase these percentages starting in January 1, 2021, by not more than 2%.
While this is not an exhaustive explanation of the Apprenticeship Utilization Act, contractors and subcontractors should be sure to review all exceptions, procedures and contract requirements under the Act.
Transferable Tax Credits for Affordable Housing – SB 448
According to the Nevada Housing Coalition, Nevada has an affordable housing shortage. By some metrics, Nevada is among the worst states for affordability due, in part, to rising housing costs. One potential solution goes into effect on Jan. 1: SB 448.
SB 448 is a four-year pilot program providing $10 million in tax credits for each fiscal year for the development, acquisition, construction, improvement, expansion, reconstruction or rehabilitation of low-income housing to qualified project sponsors. The transferable credits may be applied to the modified business tax, gross gaming tax or insurance premium tax (or any combination thereof).
These tax credits are intended to encourage development and rehabilitation of affordable housing to overcome the shortage in Nevada’s markets. Those seeking to take advantage of these credits should consider speaking to experts regarding regulatory requirements and how to apply the tax credits moving forward.
Call Center Relocation Notification – AB 271
Specific Nevada businesses seeking to relocate Nevada-based call centers to a foreign country will now be subject to new notice requirements. The affected businesses are those that employ 50 or more “call center” employees that intend to move 30% or more of their total call center operating volume.
Businesses in this category that have received “any incentive from a state agency for economic development,” including “any grant, loan, tax credit, or abatement” within the previous 10 years, must provide notice and additional information to the Nevada Labor Commissioner, and to the employees who will be displaced due to relocation, no later than 90 days prior to relocation. Businesses that have not received those incentives, but that still fall within the 50/30 designation, will be subject to a 60-day notice requirement.
Businesses that fail to provide the notice required by this new law are subject to civil penalties. Further, businesses that relocate their Nevada-based call centers to foreign countries will be ineligible to receive economic incentives from Nevada or its agencies for five years following the date of notice of relocation. While there are certain exceptions to this rule, businesses should consider this restriction as part of their overall business strategy when contemplating outsourcing Nevada call centers.
Campaign Finance Reform – SB 557
Candidates for public office and those who support them are subject to three new laws starting Jan. 1. First, candidates and public officers are prohibited from spending campaign contributions for “personal use,” which is defined as “a commitment, obligation or expense . . . that would exist irrespective” of a campaign or duties in public office. Second, candidates and public officers are now prohibited from paying themselves a salary from campaign contributions.
Third, in an effort to increase transparency, organizations that contribute $10,000 or more, in aggregate, during the course of an election cycle, are now subject to reporting requirements. Specifically, the Legislature defined “organizations” as “any form of business or social organization” and “any nongovernmental legal entity” including “a corporation, partnership, association, trust, unincorporated organization, labor union, committee for political action, political party and committed sponsored by a political party.”
Candidates, public officers, and organizations that support these individuals through campaign contributions should be mindful of these requirements as we enter an election year.
Go into the new year with a sense of perfect vision by making sure you and your business management understand the complexity of new laws going into effect on Jan. 1. While this article is intended to highlight several important laws affecting Nevada businesses, they are not comprehensive details regarding each new law. Businesses should take care to remain compliant to ensure that 2020 is their best year yet.
This article was originally published on Dec. 26, 2019, on the Snell & Wilmer website. Edelblute is an associate in the Las Vegas law offices of Snell & Wilmer. He focuses his practice in complex commercial litigation. Phone: (702) 784-5353; email: email@example.com.
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