Nevada workers pay hidden cost for minimum wage hike

Critics of Nevada’s new minimum wage increase warn the July mandate could reduce employers’ incentive to provide certain healthcare benefits. 

Effective July 1, every employee across Nevada must be paid a minimum wage of $12 an hour, regardless of workplace health-care benefits. The policy represents an increase from the state’s previous minimum wage of $11.25 an hour or $10.25 an hour if an employer offered qualifying health benefits.

The new law overhauls Nevada’s two-tiered minimum wage system that allowed employers to pay different wages corresponding to the health benefits they offered. Under the previous minimum wage structure, employers that provided health benefits such as maternity and newborn care, mental health and substance use disorder services, and preventive and chronic disease management were allowed to pay employees a wage rate up to $1 lower than the state minimum wage. Critics say the new law’s uniform policy strips employers of incentives to provide quality healthcare benefits to employees. 

JJ Wylie, who runs a small business in Las Vegas, told KTNV that the wage increase would force him to raise prices by 25-50 cents. He noted the rising costs customers will see at his coffee shop while saying the increase keeps the pay scale “equitable.” 

In 2019, then-Gov. Steve Sisolak (D-NV) signed a bill that raised the Nevada minimum wage by 75 cents each year beginning on Jan. 1, 2020, until it reached $12 per hour. The 2019 bill kept the healthcare flexibilities in place. However, in 2022, Nevada voters approved a ballot measure to remove the exceptions, mandating all employers pay the same wage rate, regardless of employer health benefits.

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The federal minimum wage is $7.25 per hour.

The Silver State’s minimum wage increase comes as it struggles to keep up with the rising cost of living. A recent analysis by the U.S Census Bureau found the state is the second most expensive place in the country to buy groceries while its rising housing prices continue to push homeownership out of reach for many.