Tesla refutes reports stating $25-an-hour wage: Tax incentives stands unaffected

Even after a lot of hue and cry over the wage payment issue, Tesla qualifies to get tax incentives of approximately $1.3 billion for its Gigafactory. Tesla plans to build a massive battery plant called the Gigafactory, in the desert east of Reno, and hire 6,500 workers over the next eight years.

The issue revolved around the alleged report which was used in a Reno Gazette-Journal article and was picked up by other media outlets. Tesla disputed the $25-per-hour wage written in the article.

Tesla had submitted an application to the Nevada Governor’s Office of Economic Development in October, 2014 to receive tax incentive. The application stated that the Gigafactory will provide employment to thousands of people in the next four years, with an estimated wage rate of $26.16 per hour. People involved in the production process would earn around $22.8 per hour, while engineers and senior staff members will be paid above $41 per hour.

Now, Tesla Motors refutes the said reports which stated it will pay an average hourly wage of $25 to the workers. Tesla spokeswoman in an email to Reno Gazette-Journal said that the Company will not comment on what it would pay and also stated that — “We did submit an application to the state of Nevada last October which included projections of average hourly wage costs for its operational workforce that were informed by regional wage trends,” Tesla has verified that the estimates were high as they were based on available wage information at that point of time and that it would stick around $22-per-hour wage payment[1].

However, according to Steve Hill – Director at Governor’s office of Economic Development, it is a usual thing to present bigger value in such tax incentive applications. Steve Hill further said that – “a $22 per hour wage will have no implications on Tesla, as it would still be under the range which allows it incentives, perhaps the highest the state has ever paid.” And “Oftentimes, companies come and pay substantially more than what is required for them to receive abatements and incentives. We often do not hold those companies to the exact amount (in the application) because, frankly, if we did, everybody would just say they would pay the minimum amount required because they do not want to over commit and put themselves in jeopardy in the future.”

While the company has urged to withdraw the initial estimates it had submitted to the state, it still appears to qualify for tax incentives for the Gigafactory located in Northern Nevada.

[1] http://www.mercurynews.com/business/ci_27920952/tesla-disputes-report-25-an-hour-pay

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