Before the Court En Banc. Opinion by Justice Gibbons.
In this appeal, the Court concluded that Nevada’s workers’ compensation laws require an average monthly wage calculation to include untaxed tip income if an injured employee had reported that tip income to the employer. Respondent worked as a bartender and was paid an hourly wage in addition to tip income, which Respondent regularly reported to the employer. Neither Respondent nor Employer paid taxes on the tip income or reported it to the IRS. Respondent then sustained a compensable back injury at work and received workers’ compensation benefits and a permanent partial disability award. The average monthly wage calculation used to determine his benefits, however, did not include Respondent’s untaxed tip earnings. The Court held that a plain reading of NRS 616B.227 requires the inclusion of any tips that were reported by the employee. The Court rejected Appellant’s argument that the inclusion of the reported but untaxed tips would result in a windfall for Respondent; holding instead that Respondent’s tax liability is a separate matter between the employee and the federal government. Affirmed. (Adam Hosmer-Henner, Associate in the Reno office of McDonald Carano Wilson LLP).
