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Open-Ended Suspensions Pending Investigations Could Violate New State Labor Regulations

Volume 3, Issue 14
September 30, 2004

Among the various changes implemented by the Acting Nevada Labor Commissioner in new amendments to Chapter 608 of the Nevada Administrative Code, is the use of certain rebuttable presumptions that will be used in assessing a claim for unpaid wages. One such presumption relates to employees placed on indefinite suspensions. In such situations, absent any evidence to the contrary, employees will be presumed to have been discharged, triggering an employer's obligation to provide immediate payment of all earned wages and compensation. This new presumption impacts Nevada employers' ability to place an employee on suspension pending investigation.

On September 13, 2004, Kamer Zucker & Abbott was advised by the Acting Labor Commissioner that:

Unless the employee was told at the time that the suspension began how long the suspension would last, a suspension pending investigation would still be an indefinite suspension. The employer could try to rebut the termination presumption on the grounds that even though the length of the suspension was not known to any degree of certainty, the intent of the suspension was to allow adequate time for an investigation and decision to be made. Generally this would be a reasonable rebuttal, but the facts and circumstances of each situation would need to be reviewed independently.

- Letter from Michael Tancheck, Acting Labor Commissioner, to Edwin A. Keller, Jr., Esq., dated September 10, 2004, at page 2 (on-file at Kamer Zucker & Abbott).

Even without the new presumption, employers have always been well advised to: (1) clearly communicate the purposes underlying a suspension pending investigation, the length of the suspension, and the method in which contact will be made with the suspended employee; (2) take steps to conduct timely investigations, so that suspensions pending investigations consist of only a matter of days, not weeks; as well as (3) obtaining current contact information so that the employee can be reached in an expedient manner.

Based on the Acting Labor Commissioner's enforcement guidance concerning the application of the new termination presumption for indefinite suspensions, employers should modify their suspension pending investigation policies to place a specific time frame on the length of such suspensions that is communicated to employees in writing. Employers would still have the option of calling the suspended employee back earlier or of extending the suspension for a further specific time frame if necessary.

Adopted Regulation of the Labor Commissioner, LCB File No. R115-04 (effective Aug. 25, 2004) (amending Chapter 608 of the Nevada Administrative Code)

Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.