Prevailing wage on Tourism Improvement District projects, and retroactivity before TID approval

STATE OF NEVADA
JOE LOMBARDO DR. KRISTOPHER SANCHEZ
Governor Director

                                                                                                               BRETT HARRIS, ESQ.
                                                                                                                Labor Commissioner




                          DEPARTMENT OF BUSINESS AND INDUSTRY
                    OFFICE OF THE LABOR COMMISSIONER
                                                     June 17, 2024

Travis F. Chance, Esq.
Brownstein Hyatt Farber Schreck, LLP
100 North City Parkway, Suite 1600
Las Vegas, NV 89106
Email: [email protected]

Re: Request for Advisory Opinion—The Application of NRS 338 to Tourism Improvement
Districts Pursuant to NRS 271A

Dear Mr. Chance,

    Pursuant to Nevada Administrative Code ("NAC") Section 607.650, an Advisory Opinion

has been requested by you clarifying the applicability of NRS Chapter 338 to a Tourism
Improvement District ("TID") (NRS Chapter 271A). As set forth in NAC 607.650, this Advisory Opinion
is limited to the facts and circumstances set forth in the request. This Advisory Opinion shall not
apply to any pending administrative, civil, or criminal proceeding and shall not be relied upon by
any party, whether a party at issue in the facts or not, in any future proceeding unrelated to the
specific and unique facts and circumstances set forth in the request.

                                               APPLICABLE LAW

   As you indicate in your Request for Advisory Opinion, when a "Municipality" as defined

by NRS 271A.010 sponsors a "Project" as defined by NRS 271A.050 or creates a Tourism
Improvement District ("TID") pursuant to NRS 271A.070, construction on the Project or TID
requires compliance with NRS §§ 338.013-338.090 pursuant to NRS 271A.130(3). The duties of
NRS §§ 338.013-338.090 are carried out and enforced by the Office of the Labor Commissioner
("OLC").

   The OLC issues public works project numbers to Municipalities for TID Projects and

includes TID Projects in its Public Works Project database pursuant to NRS 338.013:

         NRS 338.013 Inclusion of identifying number from Labor
   Commissioner in advertisement or solicitation and bids and other responsive
   documents; reports by public bodies and contractors to Labor Commissioner.



   Carson City: 1818 E. College Parkway, Suite 102, Carson City, Nevada 89706 - Telephone (775) 684-1890 - Fax (775) 687-6409
         Las Vegas: 3340 W. Sahara Avenue, Las Vegas, Nevada 89102 - Telephone (702) 486-2650 - Fax (702) 486-2660
                                      www.labor.nv.gov      [email protected]

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               1. A public body that undertakes a public work shall request from the
   Labor Commissioner and include in any advertisement or other type of solicitation,
   an identifying number with a designation of the work. That number must be
   included in any bid or other document submitted in response to the advertisement
   or other type of solicitation.
               2. Each public body which awards a contract for any public work shall
   report its award to the Labor Commissioner within 10 days after the award, giving
   the name and address of the contractor to whom the public body awarded the
   contract and the identifying number for the public work.
               3. Each contractor engaged on a public work shall report to the Labor
   Commissioner and the public body that awarded the contract the name and address
   of each subcontractor whom the contractor engages for work on the project within
   10 days after the subcontractor commences work on the contract and the identifying
   number for the public work.
                4. The public body which awarded the contract shall report the
   completion of all work performed under the contract to the Labor Commissioner
   before the final payment of money due the contractor by the public body.

    The OLC also enforces certified payroll reporting from all contractors and subcontractors

to the Municipality sponsoring the TID and payment of Nevada prevailing wage. Contractors and
subcontractors working on TIDs must submit certified payroll reporting to the Municipality
sponsoring the TID in manner and form pursuant to NRS 338.070(5)-(6):

           5. A contractor engaged on a public work and each subcontractor engaged
   on the public work shall keep or cause to be kept:
                (a) An accurate record showing, for each worker employed by the
   contractor or subcontractor in connection with the public work:
                    (1) The name of the worker;
                    (2) The occupation of the worker;
                    (3) The gender of the worker, if the worker voluntarily agreed to
   specify that information pursuant to subsection 4, or an entry indicating that the
   worker declined to specify such information;
                    (4) The ethnicity of the worker, if the worker voluntarily agreed to
   specify that information pursuant to subsection 4, or an entry indicating that the
   worker declined to specify such information;
                    (5) If the worker has a driver's license or identification card, an
   indication of the state or other jurisdiction that issued the license or card; and
                    (6) The actual per diem, wages and benefits paid to the worker; and
               (b) An additional accurate record showing, for each worker employed
   by the contractor or subcontractor in connection with the public work who has a
   driver's license or identification card:
                    (1) The name of the worker;
                    (2) The driver's license number or identification card number of
   the worker; and
                    (3) The state or other jurisdiction that issued the license or card.
               6. The records maintained pursuant to subsection 5 must be open at all
   reasonable hours to the inspection of the public body awarding the contract. The
   contractor engaged on the public work or subcontractor engaged on the public work
   shall ensure that a copy of each record for each calendar month is received by the
   public body awarding the contract no later than 15 days after the end of the month.

   Carson City: 1818 E. College Parkway, Suite 102, Carson City, Nevada 89706 - Telephone (775) 684-1890 - Fax (775) 687-6409
         Las Vegas: 3340 W. Sahara Avenue, Las Vegas, Nevada 89102 - Telephone (702) 486-2650 - Fax (702) 486-2660
                                      www.labor.nv.gov      [email protected]

Page 3

   The copy of the record maintained pursuant to paragraph (a) of subsection 5 must
   be open to public inspection as provided in NRS 239.010. The copy of the record
   maintained pursuant to paragraph (b) of subsection 5 is confidential and not open
   to public inspection. The records in the possession of the public body awarding the
   contract may be discarded by the public body 2 years after final payment is made
   by the public body for the public work. The Labor Commissioner shall adopt
   regulations authorizing and prescribing the procedures for the electronic filing of
   the copies of the records required to be provided monthly by a contractor or
   subcontractor to a public body pursuant to this subsection.

    The rate of pay for skilled mechanics, skilled workers, semiskilled workers, or unskilled

labor on a TID Project must not be less than the rate of such wages then prevailing in the region
in which the TID is located. NRS 338.020. Applicable rates can be found on the OLC's website
at: Public Works & Prevailing Wages (nv.gov). The rate that applies to a TID Project is determined
by NRS 338.030(9)(b), which states:

    9.  If the contract for a public work:
               …
                (b) Is not to be awarded pursuant to a competitive bidding process,
   except as otherwise provided in this paragraph, the prevailing rate of wages in effect
   on the date on which the contractor for the contract is selected by the awarding
   body must be paid until the completion or termination of the contract or for the 36
   months immediately following the date on which the contractor was selected,
   whichever is earlier. If the contract is not entered into within 90 days after the date
   of the selection of the contractor, the prevailing rates of wages in effect on the date
   on which the contract is entered into must be paid until the completion or
   termination of the contract or for the 36 months immediately following the date on
   which the contract was entered into, whichever is earlier.

    Prevailing wage rates must be posted on the site of the TID and signed acknowledgement

of disclosure is required from all workers pursuant to NRS 338.020 and Assembly Bill 210 from
the 2023 Nevada Legislative Session. Persons who fail to comply with NRS 338.013-090 are guilty
of a misdemeanor and may incur penalties, fees, and disqualification from working on Public
Works Projects.

                                              ADVISORY OPINION

In your Request for Advisory Opinion you pose the following questions:

1. Because Chapter 271A only imposes the requirement to pay prevailing wages on contracts
   for work on "any project that is paid for in whole or in part: … [f]rom the proceeds of
   bonds or notes issued pursuant to paragraph (a) of subsection 1 of NRS 271A.120" or
   "[p]ursuant to an agreement for reimbursement entered into pursuant to paragraph (b) of
   subsection 1 of NRS 271A.120," when is the requirement to comply with the prevailing
   wage statutes under NRS Chapter 338 triggered if construction on a project begins prior to
   TID approval and the project is later approved as a TID project?

Office of the Labor Commissioner Opinion: NRS Chapter 338 is triggered when the Project is
approved as a TID project. However, the requirement to pay prevailing wage applies to the entirety

   Carson City: 1818 E. College Parkway, Suite 102, Carson City, Nevada 89706 - Telephone (775) 684-1890 - Fax (775) 687-6409
         Las Vegas: 3340 W. Sahara Avenue, Las Vegas, Nevada 89102 - Telephone (702) 486-2650 - Fax (702) 486-2660
                                      www.labor.nv.gov      [email protected]

Page 4

of the project retroactively upon approval.

2. If construction on a project begins and prevailing wages are not paid prior to TID approval,
   and the project is later approved as a TID project, will prevailing wages be retroactively
   enforced for the work performed on the project prior to TID approval?

Office of the Labor Commissioner Opinion: Yes.

3. If construction on a project begins and prevailing wages are not paid prior to TID approval,
   and the project is later approved as a TID project, will the failure to pay prevailing wages
   prior to approval be construed as a violation of NRS Chapter 338, in which case penalties
   could be imposed?

Office of the Labor Commissioner Opinion: Yes, unless retroactive prevailing wage payments are
paid as needed.

4. If construction is completed on a project prior to TID approval, and thus only
   reimbursement is sought under NRS 271A.130(3)(b), and assuming reimbursement is only
   sought for certain parts of the project, do the prevailing wage statutes under NRS Chapter
   338 apply only as to the work that is the subject of the reimbursement?

Office of the Labor Commissioner Opinion: No. NRS 271A.130 requires compliance with NRS
338.013-130 on the entirety of the TID project.

5. In the public works context under NAC Chapter 338, "[a]fter a contract has been awarded,
   the prevailing rates of wages in effect at the time of the opening of bids remain in effect
   for the duration of the project." NAC 338.040(3). If there is no opening of bids for a public
   works project, "the prevailing rates of wages in effect on the date the contractor for the
   contract for the public work is selected by the awarding body will be in effect for the
   duration of the project." NAC 338.065(1). Because competitive bidding is not required for
   TID projects, see NRS 271A.130, and a contractor on a TID is not "selected by [an]
   awarding body" for a TID project, see NRS 271A.130(3), what is the equivalent triggering
   event for TID projects that determines which prevailing wages are in effect for the duration
   of the project?

Office of the Labor Commissioner Opinion: Since there is no bidding process, a TID should apply
the prevailing wage rates as described in NRS 338.030(9)(b). That requires workers on the TID
Project be paid the prevailing rate of wages in effect on the date on which the contractor is selected
to perform work for the TID Project. If a contract is not entered into within 90 days of the date of
selection, the prevailing wage rates that apply are the published prevailing wages for the region on
the date the contract to perform work is executed.
…
…
…

   Please be advised that this Advisory Opinion is limited to the specific facts and

circumstances described herein. The Office of the Labor Commissioner may revisit this issue

    Carson City: 1818 E. College Parkway, Suite 102, Carson City, Nevada 89706 - Telephone (775) 684-1890 - Fax (775) 687-6409
          Las Vegas: 3340 W. Sahara Avenue, Las Vegas, Nevada 89102 - Telephone (702) 486-2650 - Fax (702) 486-2660
                                       www.labor.nv.gov      [email protected]

Page 5

through the Administrative Rulemaking Process. Please be further advised that subsequent
statutory or administrative rule changes or judicial interpretation of the statutes or rules upon which
any opinion is based may require modification or abandonment of this Advisory Opinion.

    Thank you for reaching out to the Office of the Labor Commissioner with your questions.

We appreciate the opportunity to provide information and education regarding Nevada labor laws
and their application. Should you need any additional clarification, please do not hesitate to contact
our office at (702) 486-4650.

Sincerely,

Brett K. Harris, Esq.
Labor Commissioner

    Carson City: 1818 E. College Parkway, Suite 102, Carson City, Nevada 89706 - Telephone (775) 684-1890 - Fax (775) 687-6409
          Las Vegas: 3340 W. Sahara Avenue, Las Vegas, Nevada 89102 - Telephone (702) 486-2650 - Fax (702) 486-2660
                                       www.labor.nv.gov      [email protected]