July brings higher minimum wage, but NV still lags behind AZ, CO, CA, OR, WA…

Nevada’s lowest-paid workers will get a raise starting Thursday, but whether those positions can be filled as a “workforce shortage” hits the state has some businesses concerned.

It’s the second of four increases the Legislature mandated in 2019, which have raised the state’s hourly minimum from $7.25 then to $8.75 today. If employees are not offered health care, the minimum wage rises to $9.75 Thursday. The legislation incrementally increases the lowest paying jobs to $12 per hour by 2024, or $11 if an employer offers health insurance.

Oregon and the District of Columbia will join Nevada on July 1 in raising the minimum wage. 

After a tumultuous year, Nevada added 10,200 jobs in May, as vaccines rolled out and restrictions were lifted, according to the Nevada Department of Employment Training and Rehabilitation (DETR). The number of jobs remains below pre-pandemic levels, but is up 212,700 since May 2020, an annual increase of 19.2%. The state’s unemployment rate in May was 7.8%, down slightly from 8.0 percent in April and down 16.7% when compared to May 2020.

But since restrictions have been lifted throughout the country, employers have reported labor shortages during the recovery, often blaming federal assistance that is allowing people to reevaluate their situation before returning to low paying jobs. 

“Many of our members have expressed that their key challenge is finding an available workforce that is ready to work,” said Scott Muelrath, CEO of the Henderson Chamber of Commerce.

Nevada businesses owner Paul Saginaw, co-owner of Saginaw’s Delicatessen in Las Vegas and a member of Business for a Fair Minimum Wage, says he has not had trouble hiring, partly because of their $14 an hour starting pay.

“I think it makes good business sense,” Saginaw said. “It’s very short-sighted not to realize that.”

“Nevada’s 75-cents-a-year minimum wage increases benefit workers and businesses. Going higher than the scheduled $12 by 2024 minimum wage would be much better,” Saginaw said.

Jared Meyers, owner of Legacy Vacation Resorts in Reno, Nevada and also a member of Business for a Fair Minimum Wage, said the wage increase is a step in the right direction adding that employees are more committed to a business when they are paid a living wage.

“I hope Nevada will join Florida, New Jersey, California and other states on the path to a $15 minimum wage,” said Meyers.

The two sectors hit hardest by pandemic, leisure and hospitality, and food services, have shown the most job growth recently. From April to May, leisure and hospitality added 9,500 jobs statewide, including 6,800 in Southern Nevada, and food services added 5,400 jobs, according to the Department of Employment, Rehabilitation and Training.

The food service industry, however, is still reeling from the economic repercussions of the pandemic, says the Nevada Restaurant Association, arguing that additional labor costs will only hamper their recovery.

“Restaurants have only recently been allowed to operate at full capacity after a year of dine-in restrictions, so their road to recovery will take time,” said Alexandria Dazlich, a spokeswoman for the association. “Aside from capacity, however, restaurants still face a number of obstacles such as increases in food prices and rent, supply chain logistical issues as well as paying back federal loans, workforce shortages, and finally, labor costs that extend the amount of time it will take for restaurants to return to normal.”

The Nevada Department of Business and Industry “has been doing outreach and making presentations to employer groups through the pandemic and has specifically highlighted the upcoming increase in the past 6 months with no pushback on the issue,” said Teri Williams, a spokesperson for the Department of Business and Industry Director’s Office.

A total of 74 cities, counties, and states are set to raise their minimum wages in 2021, many to $15 per hour or more, according to the advocacy group National Employment Law Project.

Nevada Democratic lawmakers, who control both houses of the Legislature, showed no interest in accelerating or increasing Nevada’s minimum wage timetable when they met earlier this year. The Legislature did however give second approval to a resolution to place a constitutional amendment to eliminate Nevada’s two-tier minimum wage structure on the 2022 ballot.  If passed, the amendment would  establish a single $12 minimum wage for all Nevada employees regardless of whether they offer health insurance.

The nation’s highest minimum wage is in Seattle, at $16.69 an hour. Several other states have higher minimum wages than Nevada. Washington state’s hourly minimum is $13.69, in Massachusetts it’s $13.50 and California’s is $13. Each of those states are on a tract to raise their wage to $15 or more. The wage in Arizona and Colorado reached $12 in 2020 and is now indexed to rise annually with inflation. 

Nationally, Democrats moved on from trying to pass minimum wage as part of the American Rescue Plan, after Republicans opposed the federal increase, and the Senate parliamentarian ruled that it was not a budget issue and so could not be passed through the so-called reconciliation process with a simple majority. President Joe Biden said he would push for a stand-alone bill to raise the federal wage to $15.

In April Biden signed an executive order that required federal contractors to pay a $15 minimum wage.

Holly Sklar, CEO of Business for a Fair Minimum Wage, says the wage increase in Nevada is a welcome start to the month “since July 24 will mark 12 years with the federal minimum wage stuck at just $7.25 an hour.”

“Raising the minimum wage boosts the spending power of people living paycheck to paycheck. And it encourages better business practices needed for shared economic recovery,” Sklar said.

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Employers are required to provide workers with a paystub or a wage record that includes both the previous rate of pay for the period up to July 1 and the increased rate of pay beginning July 1, according to the Nevada Department of Business and Industry. 

If an hourly employee’s workday spans across June 30, 2020, and July 1, 2020, two different rates of pay should be used in the record.

Employees should check their pay stubs to ensure proper payment following the raise.

Officials for the Department of Business and Industry advise workers who believe they’re not being paid correctly to contact their employer and request, in writing, the wages owed. If the error is not corrected employees can file a complaint with the Nevada Office of the Labor Commissioner.