Category Archives: Nevada

July 8, 2013

Nevada Restricts Employer Access to Social Media Accounts

Employers who like to research an applicant’s social media sites will be limited to reviewing only publicly available information under a new law passed in Nevada. Effective October 1, 2013, Nevada employers may not require or request access to an employee’s or applicant’s personal social media account. Assembly Bill 181, recently signed into law by Governor Brian Sandoval, prohibits employers from conditioning employment on the disclosure of an individual’s user name, password or other information needed to access the individual’s personal electronic services and accounts. It also prohibits employers from taking, or threatening to take, any adverse action against an employee or applicant who refuses, declines or fails to disclose their social media access information.

Unlawful for Employers to Demand Access to Personal Social Media Accounts

Under this new law, it is unlawful for an employer in Nevada to directly or indirectly seek the user name, password or other access information to a personal social media account from any employee or prospective employee. This prohibition means you cannot require, request, suggest or otherwise cause the individual to disclose the information necessary to access their personal account.

A social media account is defined to mean “any electronic service or account or electronic content, including, without limitation, videos, photographs, blogs, video blogs, podcasts, instant and text messages, electronic mail programs or services, online services or Internet website profiles.”

Interestingly, the law does not mention access to personal social media accounts that are available for public viewing without a user name or password. Accordingly, it appears that employers are not prohibited from accessing and viewing any publicly available social media accounts (though it may be risky for employers to do so for other reasons).

Discrimination and Adverse Actions Forbidden

This law also makes it unlawful for a Nevada employer to discharge, discipline, discriminate against in any manner, deny employment to, or deny promotion to any employee or prospective employee who refuses, declines or fails to disclose his or her user name, password or other information needed to access his or her personal social media account. Threats to take any such action are unlawful as well.

Exceptions for Access to Employer Systems and for Legal Compliance

The law allows employers to require an employee to disclose the user name, password or any other information to an account or service, other than a personal social media account, for the purpose of accessing the employer’s own internal computer or information system. In addition, the law does not prevent an employer from complying with any state or federal law or with any rule of a self-regulatory organization.

No Specified Enforcement Mechanism

The social media access restriction contained in Assembly Bill 181 does not specify any method by which employee or applicant allegedly harmed by a violation of the law can pursue relief. In addition, no remedies are specified in the bill. Because the bill amends Chapter 613 of the Nevada Revised Statutes on Employment Practices, a violation of the social media password protection provision conceivably could result in remedies available under that Chapter, but that conclusion is by no means clear.

Nevada Joins Trend, Becoming the Eleventh State to Restrict Employer Access to Social Media

Ten other states prohibit or restrict an employer’s access to social media accounts: Arkansas, California, Colorado, Illinois, Maryland, Michigan, New Mexico, Oregon, Utah and Washington. Numerous other states have proposed or are considering passage of social media password protection legislation. Employers located in or hiring in those states should review the applicable restrictions before seeking access to an individual’s personal social media accounts.

Disclaimer:This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

June 17, 2013

New Nevada Law Restricts Use of Credit Checks for Employment Purposes

By Anthony Hall and Dora Lane

Nevada recently joined the ever-growing list of states that restrict the use of credit reports by employers. Effective October 1, 2013, Senate Bill 127 will, with limited exceptions, prohibit Nevada employers from making an adverse employment decision based on credit information and from requesting or requiring any prospective or current employee to submit a consumer credit report as a condition of employment.

Use of Credit Reports as an Unfair Employment Practice

By amending the Employment Practices chapter of the Nevada Revised Statutes, Senate Bill 127 makes it unlawful for any Nevada employer to:

1) Directly or indirectly require, request, suggest or cause any employee or prospective employee to submit a consumer credit report or other credit information as a condition of employment;

2) Use, accept, refer to or inquire about a consumer credit report or other credit information;

3) Discipline, discharge, discriminate against or deny employment or promotion, or threaten to take such action, against any prospective or current employee on the basis of the results of a credit report or for refusing or failing to provide a credit report; or

4) Discipline, discharge, discriminate against or deny employment or promotion or threaten to take such action against any prospective or current employee for filing a complaint or instituting (or causing to be instituted) a legal proceeding under this law, testifying in any legal proceeding (actually or potentially) to enforce the provisions of this law, or exercising (individually or on behalf of another) rights afforded under this statute.

Exceptions Allowing the Use of Credit Information

Under this new law, employers are permitted to request or consider consumer credit reports or other credit information for the purpose of evaluating an employee or prospective employee for employment, promotion, reassignment or retention under the following circumstances:

When required or authorized by state or federal law;
Upon reasonable belief that the individual has engaged in specific activity which may constitute a violation of state or federal law; or
When information in the credit report is reasonably related to the position for which the employee or prospective employee is being considered (including retention as an employee).

For most employers seeking to use credit reports to evaluate employees and applicants, it is this last exception that typically comes into play. Importantly, the new law defines what shall be deemed “reasonably related” to include positions where the duties involve one or more of the following non-exclusive categories:

Care, custody and handling of, or responsibility for, money, financial accounts, corporate credit or debit cards or other assets;

Access to trade secrets or other proprietary or confidential information;
Managerial or supervisory responsibility;
The direct exercise of law enforcement authority as a state or local law enforcement agency employee;
The care, custody and handling of, or responsibility for, the personal information of another person;
Access to the personal financial information of another person;
Employment with a financial institution chartered under state or federal law (including subsidiaries or affiliates of such financial institutions); or
Employment with a licensed gaming establishment.

Public and Private Enforcement of Credit Report Law

This new law provides for two types of enforcement mechanisms with a three year statute of limitations. First, an individual harmed by a violation of this statute may file a private lawsuit against the allegedly offending employer. The lawsuit may be filed on behalf of the individual employee or prospective employee, or on behalf of other similarly situated employees or prospective employees. Courts may grant successful plaintiffs various remedies including employment, reinstatement or promotion to the position applied for, lost wages and benefits, attorney’s fees and costs and any other equitable relief deemed appropriate (without the issuance of a bond).

Second, the Nevada Labor Commissioner may impose an administrative penalty against an employer of up to $9,000 for each violation of the law or may bring a civil lawsuit against the employer to obtain equitable relief as may be appropriate, such as employment, reinstatement or promotion of the employee and the payment of lost wages and benefits.

Complying with Credit Restriction Laws in Ten States

In enacting this new law, Nevada became the tenth state to restrict the use of credit reports for employment purposes, joining California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont and Washington. Additional states are considering similar legislation. Further, the Equal Employment Opportunity Commission (EEOC) has targeted employers for the use of credit reports as potentially causing disparate impact on certain protected groups. Complying with these laws can be challenging, especially for multi-state employers.

Prior to the October 1, 2013 effective date of Nevada’s new law, employers who use credit reports or credit information in their hiring or evaluation process need to review their screening policies. Specifically, employers hiring individuals in Nevada need to evaluate each position for which they want to use credit reports and determine if the position falls under one of the enumerated exceptions in Senate Bill 127 that allows the use of credit information on applicants and/or current employees. If the duties of the position do not fall within the list of exceptions, employers should evaluate whether the credit report “is reasonably related to the position.” If the answer to both of these questions is “no,” then the employer should not request or use credit reports or other information from a consumer reporting agency when evaluating candidates for that position. Employers with operations or hiring needs in multiple states need to stay abreast of the latest legal requirements to ensure that their credit screening policies comply with each applicable state restriction. This may mean implementing a different credit screening policy in those states where the use of credit reports is restricted by law.

Disclaimer: This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

January 17, 2011

How to Properly Withhold from Employees’ Final Paychecks in Nevada

Dora Lane

In Gordon v. City of Oakland, Case No. 09-16167 (9th Cir., Nov. 19, 2010), the United States Court of Appeals for the Ninth Circuit (which includes Nevada) held that the City could properly require an employee who had left a job within a specified period of time to reimburse the City for training costs that the City had paid in anticipation that the employee would remain employed with the City for that period of time, without violating the Fair Labor Standards Act ("FLSA"). An important part of the Gordon decision was the fact that the City actually paid the employee's full final paycheck, but later sent her a reimbursement request for the training costs she had previously agreed to repay. The employee unsuccessfully argued that the City's repayment request violated the FLSA and California wage and hour laws because, had she had to pay for the training, her wage rate would have fallen below the applicable minimum wage for the final pay period. In affirming the lower court's decision to throw out the employee's case, the Ninth Circuit noted that, by advancing the training costs to the employee, the City had essentially given her a loan, and that there was a difference between withholding earned wages and asking for a loan repayment.

The Gordon decision brings to the forefront a frequent practice by Nevada private employers which, unfortunately, also frequently runs afoul of Nevada law. For example, it is not uncommon for Nevada employers to issue credit cards to employees, or entrust them with expensive equipment or materials, or permit them to use a company vehicle in the course of their employment. In those circumstances, employers also often require the employee to execute an authorization, allowing the employer to deduct any related costs for which the employee is responsible, from the employee's final paycheck (e.g., any outstanding credit card charges for personal expenses, loss of materials or equipment, etc.) Employers should be mindful, however, that Section 608.160 of the Nevada Administrative Code provides that, with very limited exceptions, an employer may not deduct any amount from the wages due an employee unless:

(a) The employer has a reasonable basis to believe that the employee is responsible for the amount being deducted by the employer;

(b) The deduction is for a specific purpose, pay period and amount; and

NAC 608.160 specifically provides that "[a]n employer may not use a blanket authorization that was made in advance by the employee to withhold any amount from the wages due the employee." Rather, as stated in NAC 608.160, the employer must secure the employee's written authorization for the deduction "for a specific purpose, pay period and amount." In other words, the authorization which the employee made before actually incurring the expense (and on which employers often rely) is likely insufficient to support the deduction from wages under Nevada law.

Employers often find this requirement troublesome because employees may refuse to execute the authorization or may be otherwise unavailable to do so, or both (as in cases of terminated employees). Many employers feel that withholding money from the employee's final paycheck is the only way they could ever recoup the losses that the employee caused the employer to suffer. While in reality that may sometimes be the case in reality, the proper way to recoup these losses (absent a written authorization consistent with NAC 608.160) is to bring a separate action against the employee to recover the losses. Ordinarily, the disputed amount is under $5,000.00, which allows an employer to file a lawsuit against the employee in Small Claims Court, even without an attorney. If the amount exceeds $5,000.00, but is less than $10,000.00, an employer can file a lawsuit in Justice Court..

On a final note, even where the employee properly authorized the wage deduction, employers should be mindful of whether the total wages paid to the employee for the respective pay period fall under the applicable federal and Nevada minimum wage rates. If this is the case, the full deduction may still be inappropriate.