AB255 - Prohibits certain provisions in certain employment contracts or similar agreements. (BDR 53-116)

A.B. 255 - *AB255* ASSEMBLY BILL NO. 255–ASSEMBLYMEMBER LA RUE HATCH FEBRUARY 18, 2025 ____________ Referred to Committee on Commerce and Labor SUMMARY—Prohibits certain provisions in certain employment contracts or similar agreements. (BDR 53-116) FISCAL NOTE: Effect on Local Government: No. Effect on the State: No. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to employment practices; prohibiting certain conditions, stipulations and provisions in certain contracts and agreements that require an employee or independent contractor to pay a sum of money if the person leaves employment or ceases providing services before the passage of a specified period; setting forth the manner by which that prohibition may be enforced; providing penalties; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law sets forth certain prohibited employment practices. (Chapter 613 1 of NRS) Section 1 of this bill prohibits a contract or other agreement between a 2 private employer and an employee or an independent contractor from including any 3 condition, stipulation or provision that requires the employee or independent 4 contractor to pay to the employer or other person designated by the employer any 5 sum of money if the employee or independent contractor leaves the employment of 6 the employer or ceases providing services to the employer before the passage of a 7 specified period. Section 1 prohibits an employer from: (1) requesting that an 8 employee, prospective employee or independent contractor enter into a contract 9 or agreement that violates section 1; (2) requiring that a prospective employee or 10 independent contractor enter into such a contract or agreement; (3) executing or 11 attempting to enforce any condition, stipulation or provision of a contract that 12 violates section 1; and (4) obtaining or attempting to obtain a waiver of the 13 provisions of section 1. 14 Section 1 authorizes the Labor Commissioner to impose an administrative fine 15 upon an employer that engages in any of the acts prohibited by section 1 in an 16 amount of not less than $1,000 and not more than $5,000 for each violation. 17 Section 1 additionally authorizes the Attorney General to bring an action against 18 such an employer seeking an injunction or other equitable relief or a civil penalty of 19 – 2 – - *AB255* not less than $1,000 and not more than $5,000 for each violation. Finally, section 1 20 authorizes an employee, prospective employee or independent contractor who is 21 aggrieved by an employer’s violation of section 1 to bring an action on his or her 22 own behalf or on behalf of a similarly situated class of persons against the 23 employer to recover or obtain certain relief. 24 Section 2 of this bill applies the provisions of section 1 to any contract or 25 agreement entered into before, on or after October 1, 2025. 26 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. Chapter 613 of NRS is hereby amended by adding 1 thereto a new section to read as follows: 2 1. An employment contract or other agreement between an 3 employer and an employee or a contract or other agreement 4 between an employer and an independent contractor to provide 5 services to the employer must not contain any condition, 6 stipulation or provision that requires the employee or independent 7 contractor to pay to the employer or other person designated by 8 the employer any sum of money if the employee leaves the 9 employment of the employer or the independent contractor ceases 10 providing services to the employer before the passage of a 11 specified period, regardless of whether the payment is 12 characterized as reimbursement for any training provided, 13 replacement costs, training costs for a replacement employee, lost 14 revenue, liquidated damages or any other substantially similar 15 characterization. 16 2. An employer shall not: 17 (a) Request that an employee, prospective employee or 18 independent contractor enter into a contract or other agreement 19 that violates subsection 1. 20 (b) Require a prospective employee or independent contractor, 21 as a condition of employment or the entering of a contract for 22 services, to enter into a contract or other agreement that violates 23 subsection 1. 24 (c) Execute or attempt to enforce any condition, stipulation or 25 provision of a contract or other agreement that violates 26 subsection 1. 27 (d) Obtain or attempt to obtain a waiver of the provisions of 28 this section. 29 3. Any condition, stipulation or provision of a contract or 30 other agreement that violates subsection 1 and any waiver of the 31 provisions of this section is contrary to public policy, void and 32 unenforceable. 33 – 3 – - *AB255* 4. Each act that constitutes a violation of subsection 2 1 constitutes a separate violation. 2 5. In addition to any other penalty, the Labor Commissioner 3 may impose against an employer who violates subsection 2 an 4 administrative fine of not less than $1,000 and not more than 5 $5,000 for each violation. If the Labor Commissioner imposes an 6 administrative fine pursuant to this subsection, the Labor 7 Commissioner may recover the costs of the proceeding, including, 8 without limitation, investigative costs and reasonable attorney’s 9 fees. 10 6. In addition to any other penalty, the Attorney General may 11 bring an action in the name of the State of Nevada against an 12 employer who violates subsection 2 seeking an injunction or other 13 equitable relief or a civil penalty of not less than $1,000 and not 14 more than $5,000 for each violation. If the Attorney General 15 prevails in such an action, the Attorney General is entitled to 16 recover the costs of the proceeding, including, without limitation, 17 investigative costs and reasonable attorney’s fees. 18 7. An employee, prospective employee or independent 19 contractor aggrieved by an employer’s violation of subsection 2 20 may bring an action on his or her own behalf or on behalf of a 21 similarly situated class of persons against the employer to recover 22 or obtain: 23 (a) Actual damages; 24 (b) Additional statutory damages of $5,000 for each violation; 25 (c) An injunction or other equitable relief; and 26 (d) Reasonable attorney’s fees and costs. 27 8. The Labor Commissioner may adopt regulations to carry 28 out the provisions of this section. 29 9. The provisions of this section do not apply to any 30 condition, stipulation or provision in a contract or other 31 agreement that provides for the repayment of any cash advance or 32 money paid as prepayment for services to be provided. 33 10. As used in this section, “employer” does not include a 34 public employer. 35 Sec. 2. The provisions of this act apply to any contract or 36 agreement entered into before, on or after October 1, 2025. 37 H