A Carson City District Court Judge has ruled that tips can no longer be counted as earnings when determining whether the cost of insurance coverage exceeds 10 percent of that employee’s gross taxable income, according a press release from the Nevada Association of Employers. Removing tips from the employee’s income would make it harder for the employer’s health insurance plan to meet the criteria for “qualified health insurance” per the constitutional amendment passed in 2006. If the insurance is not “qualified” the employer would be required to pay a minimum wage of $8.25/hour rather than $7.25/hour.
The Judge also ruled that an employee must actually be covered by the health plan rather than simply being “offered” the plan. If the employee does not enroll in the plan the employer would be required to pay the higher tier minimum wage of $8.25/hour.
The Nevada Labor Commissioner, Shannon Chambers, told NAE this week that she will file for a stay of the ruling in the next several days. If the stay is not granted employers would be required to comply with the ruling. NAE will stay in touch with the Labor Commissioner for more information as it is made available.
