Nevada law requires that certain companies offer their employees paid time off (PTO), also known as paid leave. Qualifying Nevada employees are entitled to at least 0.01923 hours of PTO for every hour they work, up to 40 hours per benefit year. For example, according to Nevada law, an employee working 40 hours in one week should earn at least 0.7692 hours of PTO for that week.
All Nevada businesses should understand how paid leave works in the state to ensure they comply with the law. Businesses not adhering to Nevada PTO laws can face legal action.
Nevada PTO Laws, In Depth
Nevada’s statutes precisely state what is expected of companies and their employees regarding paid time off policy-making and usage. Here, we break down the most pertinent information that Nevada business owners should know when crafting their PTO policies.
Accruing PTO in Nevada
Nevada uses the term benefit year to define a PTO period. A benefit year is simply the 365-day period an employer uses to help calculate how many hours an employee is entitled to. The accrual process begins on the first day of the employer’s benefit year and ends on the last day of that benefit year. Many companies make a benefit year from January 1 through December 31, but others may align a benefit year with their fiscal year.
Depending on whether the employee works a set number of hours each year or has varying hours, the employer can allow PTO hours to accrue in one of two ways. First, the employee can receive all the PTO hours they are entitled to on the first day of the new benefit year. Alternatively, they can accrue the hours throughout the benefit year, depending on how many hours they work.
Valid Reasons to Use PTO
Employees can use their Nevada paid sick leave and PTO for virtually any reason, and employers are not allowed to dictate valid reasons for using it. Nevada PTO law specifically names the following reasons as valid in its statute, NRS 608.0197:
- Caregiving for another person
- Receiving preventative care, medical care, or a medical diagnosis
- Treating a physical or mental health issue
- Addressing personal health needs
However, the law does not limit PTO usage to these reasons alone. These are just examples of reasons employees may have for using their PTO. Additionally, employers must allow employees to use up to four hours of PTO when receiving a COVID-19 vaccination. This legislation is effective through December 31, 2023.
Calculating PTO Rate of Pay
If an employee is paid by the hour, their employer must compensate them the same hourly wage when paying their PTO. For example, an employee who works for $30 per hour also receives $30 per hour of paid leave.
Calculating PTO for salaried employees in Nevada is a bit different because they don’t have a set hourly wage. Instead, an employer divides the employee’s wages from the past 90 days by the number of hours worked in those 90 days to determine the hourly rate for the employee’s time off. Therefore, a salaried employee earning $25,000 from 550 hours worked in the past 90 days should be paid $45.45 per PTO hour.
Although it could benefit employees to keep a personal record of the PTO they’ve used and have left, only employers are required to record PTO usage according to Nevada law. Section 5 of NRS 608.0197 states that the employer must maintain a record of PTO for each employee for up to one full year after adding or updating any information to the record.
As an example, if an employee uses PTO beginning March 1, 2023, and you update the record on March 14, 2023, when they return to work, you should keep the record for that period of PTO through March 14, 2024. The Labor Commissioner may request PTO records for any employee at any time, making it crucial to maintain accurate, current, and complete records.
Employee PTO Rights in Nevada
When creating a PTO policy, it’s necessary to consider your employees’ rights regarding their accrued PTO and how they can use it. Nevada offers a few crucial benefits for employees that are helpful to be aware of:
- PTO usage after employment: Employees can begin using their accrued PTO after being employed for 90 days. However, their PTO begins accruing as soon as they begin employment.
- Declaring a reason for using PTO: Employees can use their paid time off for any valid reason as noted above, but they do not need to let their employer know the specific reason they use it. In other words, they can choose whether to divulge their reason or keep it private.
- Separation from employment: When an employee has separated from the company for a reason other than voluntarily separating, that employee is entitled to receive compensation for any PTO they did not use during their employment if the employer has an explicit policy or other promise about paying out the unused time off. However, employers do not need to reimburse an employee in this situation if they are being rehired within 90 days after separating from the company.
- Finding replacement employees: When an employee decides to use their paid time off, they should not be asked or required to find another worker to replace them until they return. In fact, it is against Nevada PTO laws for an employer to require this, as this responsibility falls on the employer.
What Affects Nevada PTO Laws?
Nevada provides the following exemptions for businesses regarding compliance with its PTO laws:
- Businesses with fewer than 50 employees do not need to provide PTO or comply with Nevada PTO laws.
- Employers within their first two years of operation do not need to follow Nevada PTO laws, even if they have 50 or more employees.
- Businesses are not required to provide paid time off to temporary or seasonal workers.
Do You Have to Pay Unused PTO in Nevada?
In many cases, Nevada employers are not required to pay employees any paid time off they didn’t use while employed. However, if the employee did not voluntarily leave the job and will be rehired within 90 days, the employer is responsible for reinstating the employee’s unused PTO.
Most companies have their own policies regarding the payment of unused PTO. The law states that, while employers may not be required to reimburse employees for unused PTO, they can do so if they choose. If a company’s internal policy or employee contract states that unused PTO should be reimbursed to the employee, then companies are required to uphold these policies.
In cases of employees choosing not to use all of their PTO during their benefit year, the company must allow some unused PTO to carry over into the next benefit year. However, the law allows employers to cap the amount of carryover PTO at 40 hours a year. Again, companies can choose to allow all hours to carry into the next year as part of their internal policy.
How Nevada PTO Has Changed
Nevada’s newest PTO laws went into effect January 1, 2020. In fact, the new law was the first law to govern paid time off in the state, making Nevada one of the few states with PTO laws, according to the National Conference of State Legislatures.
Notably, Nevada joins an even smaller list of states that allow employees to use their PTO without stating a specific reason to their employer.
Early language of the bill, prior to it becoming law, called for businesses with 25 or more employees to adopt these new rules into their policies. However, amendment 482 changed that number to 50, allowing some wiggle room for small businesses that may suffer financially from such a policy.
Key Resources for Nevada PTO
When researching the nuances of paid time off for your employees, it’s crucial to understand how the governing law applies to your company and employees.
If you notice any conflicting advice or guidelines as you research, refer to the Nevada Revised Statute 608.0197, which details Nevada state law for PTO. The Office of the Labor Commissioner can also help answer any questions you may have about the law and whether your policy complies.
We’ve also put together a bank of additional resources relating to Nevada paid sick leave and paid time off to help you as you structure and refine your company’s PTO policy:
- SB312 Overview: Read the senate bill that became Nevada law regarding PTO. The website also provides a documented history of the bill, including amends, hearings, and its final passage.
- Rules to Be Observed by Employers: This document summarizes Nevada’s requirements for employers, including paid leave. It also offers a concise overview of PTO in Nevada, which could be helpful to add to employee handbooks.
- NRS 608.01972: This statute describes an employer’s responsibility to provide paid leave for employees receiving a COVID-19 vaccination, which is in place through December 31, 2023.
- Sick Leave: Learn more about what constitutes sick leave and how to manage sick leave for your employees.
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