Employment-Related Issues Guide
This article is written by Amanda Brookhyser, attorney at Brownstein Hyatt Farber Schreck, LLP.
The guidance from the federal government concerning various wage-hour and other employment-related issues has been in flux since the Trump administration began in January 2025. It is important for employers to stay abreast of guidance coming from the Department of Labor (“DOL”) concerning their enforcement priorities to make sure that their internal policies and practices are aligned and do not expose them to potential enforcement actions. And as it pertains to Nevada-specific issues, there were several developments that came out of the 2025 Legislative Session, including the Special Session that just ended, of which employers need to be aware. Here are some of the highlights:
Beware of Changes in Compensable versus Non-Compensable Work Activities
The Nevada Supreme Court in its recent opinion in
Amazon v. Malloy, in which the court answered a certified question from the United States District Court for Nevada on whether Nevada law incorporates the federal Portal to Portal Act (“PPA”), has created new questions for employers on whether they will be responsible to compensate employees for time spent on activities preliminary or postliminary to work activities.
In Malloy, the court answered the narrow question of whether Nevada’s wage and hour laws incorporate the exceptions to compensable “work” that are laid out in the PPA. The certified question arose in underlying federal litigation concerning whether Amazon was required to pay its employees for the time spent underdoing testing for COVID-19 before each shift. Amazon moved to dismiss the case, arguing that the COVID-19 testing time was not compensable “work” within the meaning of the PPA. The district court denied the motion to dismiss, holding that Nevada law had not incorporated the PPA and as a result, the pre-shift screenings constituted work that required compensation under NRS 608.016.
Because Nevada’s wage-hour laws coexist with their federal counterpart, the Fair Labor Standards Act (“FLSA”), the court first undertook an analysis of whether FLSA, the PPA and Nevada’s wage-hour laws parallel each other. Congress did not define the term “work” when it enacted the FLSA, but the United States Supreme Court has interpreted it to mean “physical or mental exertion (whether burdensome of not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business.” Congress then passed the PPA to amend certain provisions of the FLSA and, specifically, providing exceptions to certain activities that would otherwise be entitled to compensation under the definition of the term “work” provided by the Supreme Court.
The PPA explicitly excludes “activities which are preliminary to or postliminary to” the principal activities the employee is employed to perform from compensation. Nevada wage-hour laws in contracts only state that “an employer shall pay to the employee wages for each hour the employee works.” Further, Nevada’s administrative regulations provide that “[a]n employer shall pay an employee for all time worked by the employee at the direction of the employer, including time worked by the employee that is outside the scheduled hours of work of the employee.”
Amazon argued that the PPA’s exceptions to compensable work must be incorporated into Nevada law since Nevada modeled its wage-hour statutes after the FLSA. The Nevada Supreme Court disagreed, however, noting that while Nevada’s statutes are modeled after the FLSA in general, Nevada’s statutes do not indicate an incorporation of the PPA’s amendments to the FLSA. The court held that Nevada’s exceptions to compensable work are materially different from those contained in the PPA. The PPA provides a catchall provision type of exception that allows certain work to go without compensation, while Nevada law does not contain that same catchall provision. Instead, Nevada law only contains narrow exceptions to compensable work, like employer/employee agreements for an exception for sleep periods during a 24-hour shift or allowing domestic service employees who reside in the workplace to agree to accept compensation for sleep and meal periods. In other words, Nevada’s narrow exceptions provide more protection to workers than the PPA’s amendments to the FLSA do. The court determined that the plain language of Nevada’s wage-hour laws does not evince a legislative intent to incorporate or mirror the PPA.
In the wake of
Malloy, Nevada employers in various industries including mining, construction and gaming were faced with the prospect of potentially compensating employees for additional activities, such as free meals pre-shift, transportation to and from a worksite or time spent dropping off a child at in-house day care. In response to the ambiguity created by
Malloy, the Nevada legislature, during the recent special session, passed Senate Bill 8, which amends NRS 608.016 to explicitly incorporate sections 2 and 4 of the PPA and to carve out donning and doffing time as still being compensable. The governor approved the amendment. This amendment provides further clarity to Nevada employers regarding the scope of compensable work, but questions still remain. Employers should seek legal guidance to ensure their compensation practices fall within these new guidelines.
New Opinion Letter Issued about How Employers Should Address Tipping
The DOL’s Sept. 30, 2025, Opinion Letter FLSA2025-03 further clarifies employers’ obligations concerning complicated tip pooling issues. The guidance is particularly applicable to those employers in the restaurant and hospitality industries. The DOL was considering the question of whether an employer may include “front-of-house” oyster shuckers in a restaurant’s tip pool with servers for whom the employer takes a tip credit under the Fair Labor Standards Act (FLSA). Under the FLSA, an employer may require employees for whom a tip credit is taken to contribute tips to a tip pool only if the pool “is limited to employees who customarily and regularly receive tips.” A tip pool is shared with other service providers who do not receive tips directly from the restaurant’s customers but who frequently interact with customers, like a restaurant hostess, sommeliers, hibachi chefs or a barback.
The DOL clarified that employees who “directly service the customers by sharing and detailing oyster offerings” qualify as employees who “customarily and regularly receive tips” even though they do not receive tips directly from customers and thus can properly share in any tip pool. So what does this guidance mean for employers? First, interaction with customers is the deciding factor when it comes to tip pool eligibility. Front house-facing roles like hostesses, sommeliers and specialty chefs are all “service-related functions and have sufficient interaction with the customers who leave tips.” Thus, employers that take the tip credit can combine tips among qualifying staff who have a sufficient level of customer interaction. Employers should take care to adequately document when they are taking the tip credit and make sure their tip pool policies are properly laid out in any employee handbook or other written policies.
New Guidance on How Employers Calculate Overtime
Also on Sept. 30, the DOL issued an Opinion Letter concerning the application of overtime requirements in the FLSA when a certain employee works part of the time for a restaurant and part of the time for a members club, both of which operate under the same management and out of the same hotel. The question presented is whether the hours worked for both the restaurant and the club must be combined for purposes of calculating overtime, and the DOL answered in the affirmative. In the Opinion Letter, the DOL explained that under the facts presented, the restaurant and the club were considered joint employers of the employee under the FLSA. In consideration of that determination, the DOL pointed to facts like shared facilities and management, ownership and staff between the two. Thus, even though the restaurant and the club were set up as two different companies with different payroll and timekeeping systems, the DOL determined that they were joint employers for purposes of overtime calculation.
Why is this important guidance for employers? Employers that do not properly calculate overtime under the FLSA are subject to penalties. Thus, even if on its face it appears that any single employee is working for two different companies, the hours worked for both must be added together for purposes of calculating overtime if the companies are so closely related as to be joint employers. Employers should closely scrutinize any joint employer relationships to ensure that shared employees’ hours are calculated in detail to ensure that all appropriate wages and overtime are paid in order to avoid any financial penalties.
New Guidance on How to Calculate Leave Under the FMLA
The DOL issued an Opinion Letter concerning how to calculate available leave under the Family and Medical Leave Act (FMLA) for correctional officers who work on a “Pitman schedule” requiring 12-hour shifts over a two week cycle with mandatory overtime. The correctional officers were also able to volunteer for additional hours that were not part of their mandatory schedule. The FMLA entitles eligible employees of covered employers to take job-protected leave for certain covered reasons. Under the FMLA, employees may take 12 “workweeks of leave” in a 12-month period. Because employees can take up to 12 “workweeks of leave,” employers commonly convert that to 480 hours of leave for purposes of calculating, given most employees work a 40-hour week. However, correctional officers working under this Pitman schedule with mandatory overtime typically work 42-hour weeks, making their 12 “workweeks of leave” equal to 504 hours, not 480. The question, then, was whether employers needed to count that additional mandatory overtime and volunteer hours when calculating the available leave.
The DOL opined that employers calculating available leave must do so based upon the employee’s actual, normal scheduled workweek, which under this schedule would include the mandatory overtime. The additional voluntary hours need not be included when calculating any FMLA entitlement. The key takeaway for employers is that the actual workweek is what counts for FMLA entitlement.
Legislation Passed with Additional Regulations for the Employment of Minors
During the 2025 Legislative Session, the Nevada legislature passed AB 215, which revises NRS 609.240 to add a new section that restricts the employment of minors under the age of 16 from working more than 48 hours in a week, or more than 8 hours in a day. NRS 609.240 now only allows minors under the age of 16 to work 40 hours in a week and prohibits minors from working between the hours of 11:00 p.m. and 6:00 a.m. except in certain circumstances such as employment as a lifeguard, in an arcade or as part of a film or theater production. The governor signed the legislation and it went into effect on Oct. 1.
