Report: Laxalt, Duncan cost Nevadans $8 million in overtime

Nevada workers who earn between roughly $24,000 and $48,000 annually are losing out on $8 million a year in overtime wages, according to a new report. The report from the National Employment Law Project Action Fund blames gubernatorial candidate Attorney General Adam Laxalt and Laxalt’s former deputy, Wes Duncan, who hopes to replace him, for leading a national charge to block rules that would have expanded overtime eligibility.

The report says 104,000 Nevadans would have been eligible to be compensated for working overtime and that about 40,000 of those are currently working overtime without compensation.  

In 1975, 62 percent of middle-class workers were automatically eligible for overtime after working more than 40 hours in a week. Today that number has dwindled to 7 percent, according to the Economic Policy Institute. Under the 2016 rule change, 35 to 40 percent of workers would have been eligible for overtime, according to the report and other sources.

A rule change announced in 2015 and slated to take effect in 2016 would have adjusted the threshold to allow workers who earn up to $47,476 ($913 a week) to automatically qualify for overtime pay when they work more than 40 hours a week. But Laxalt enlisted other attorneys general and led a legal fight to invalidate the rule change which is unpopular with some business interests.  

Then-Labor Secretary Tom Perez said the expansion could have added as much as $1.3 billion to workers’ pay nationwide.

In a news release in August of 2017, Laxalt praised the order revoking the new threshold and took credit for spearheading the effort to derail the “Obama-era” overtime rule.  

“I applaud Judge Mazzant’s decision to permanently invalidate this Obama-era overtime rule that would have would have imposed millions of dollars of unfunded liabilities on the States and resulted in a loss of private sector jobs as well as onerous financial and regulatory burdens on small businesses in Nevada and around the country.” Laxalt said in the news release. “My office is proud to have led the charge towards a final ruling that brings clarity, certainty and closure to the business community and government alike.”

Today, only those earning an annual salary of less than $23,660 (or $455 a week) are eligible.  

The 2016 rule change was meant to raise the salaries of low-level managers in low-wage settings such as fast food restaurants.  Employment laws have generally exempted managerial staff from overtime pay and compensated them accordingly.

Harold Washington-Carnes, a former fast-food chain manager, says he’s been sent home before the end of his shift to avoid racking up overtime.

“I’ve even been sent home after half a shift and told to come back later to work the other half to avoid earning overtime,” he says.  “All the fast food joints do it.”

The report urges Nevada lawmakers to update the overtime rules.  

“In particular, under Nevada law, the governor, acting through the Nevada Labor Commissioner, has the power to update overtime pay on his or her own without need for action by the legislature,” the report says. “Governors in Pennsylvania and Washington State are already doing so.”

Governor Brian Sandoval’s spokeswoman did not respond to the Current’s request for comment.  Sandoval has cited concerns regarding overtime in the past when he’s opposed efforts to expand the minimum wage. 

In 2017, Sandoval vetoed a bill that would have increased the minimum wage to $12 for some people.  

“Such negative consequences threaten to undermine Nevada’s economic recovery by making it harder for employers to fill positions and making it more difficult for entry-level workers to access jobs in which they can acquire skills for advancement,” the governor wrote in his veto message.

Nevada is one of a few states with a daily overtime requirement in addition to the requirement to pay overtime for more than 40 hours in a workweek.

State law says employees who receive qualified health benefits from their employers and earn less than $10.87 per hour, and employees earning less than $12.37 per hour who do not receive qualified health benefits must be paid overtime whenever they work more than 8 hours in a 24-hour period.

According to the report, the majority of Nevadans who are missing out on overtime are in Clark and Washoe counties, but many are in the rural counties:

The report’s author says the dollar amount of workers have missed out on varies by individual but averages approximately $200 for those who regularly work overtime.

Laxalt and Duncan do not respond to inquiries from the Current.