Nevada Independent Contractor Law

Most Nevada independent contractor agreements are governed by state law, but federal law comes into effect under certain circumstances. Nevada almost always governs areas such as:

  • State wage and hour requirements
  • Workers' compensation
  • Unemployment tax liability

A 2015 state law establishes the presumption that a worker is an independent contractor instead of an employee if the worker maintains insurance or an occupational license, bonding, a Social Security or employer identification number, or has filed self-employment taxes during the previous year. In addition to these criteria, the worker must also satisfy at least three of the following:

  • Maintain discretion and control over work performance
  • Maintain discretion and control over when the work is performed and completed
  • Free to work for more than one business
  • Free to hire employees to assist with the work
  • Has invested capital in the business, such as purchasing equipment and tools or obtaining licenses

Senate Bill 224 was signed into law in 2015 by Nevada Governor Brian Sandoval, creating a conclusive definition of an independent contractor relationship when key elements are present. Because of this bill, Nevada employers whose relationships with workers who are categorized as independent contractors are not obligated to pay them based on the state's minimum wage. They are also freed from other state-imposed obligations regarding employer-employee relationships.

It's worth noting that just because a working relationship doesn't satisfy the new criteria, it doesn't mean a court won't find that a contractor relationship exists. The courts look at all the aforementioned factors, as well as others from case law to determine the nature of the working relationship. It's also worth noting that the new law does not create presumptions that a person is a company employee.

What is an Independent Contractor Agreement?

An independent contractor agreement is a document used when someone is hired to complete a short-term project. The agreement is a written contract between the worker and employer specifically for the outlined service or project. Unlike an employment agreement, the independent contractor agreement details why the worker being hired is not an employee for tax and legal reasons.

The independent contractor agreement may also be referred to as:

  • Freelancer contractor agreement
  • Client/service freelancer agreement
  • Contractor agreement
  • Company contractor agreement
  • Independent consultant agreement
  • Freelancer agreement

The independent contractor agreement should contain these elements:

  • Hiring company: the name of the person or business that requires the worker's services
  • Contractor: the name of the person or business hired for the specific task or project
  • Services: a description of the project or tasks which need to be performed
  • Compensation: how often and how much the contractor will be paid by the employer
  • Effective date: the date at which the agreement begins and the job starts
  • Termination: whether the hiring party can end the relationship at will and how many days a written notice is required beforehand
  • Assistants: a stipulation that the contractor can hire their own assistants must state that they are fully responsible for expenses, including Medicare and Social Security taxes
  • Fringe benefits: the worker cannot participate in the employer's sick pay, vacation pay, health, pension or unemployment benefits

In some cases, additional legal details may be included in the independent contractor agreement. These sections include:

  • Binding effect: a statement that the agreement is still in effect if someone else takes over the hiring company or contractor company
  • Assignment: neither party involved may transfer rights to the job or the right to get paid without prior written permission
  • Expenses: each party is responsible for his or her own out-of-pocket expenses, unless the employer has agreed to cover certain costs and the contractor submits invoices
  • Entire agreement: previous agreements are considered invalid and future changes must be made via a written amendment to the agreement
  • Governing law: state laws apply
  • Indemnification: when problems arise, the contracting party is responsible and must defend the employer from liability
  • Insurance: the contractor is responsible for their own insurance
  • Representations: both parties have the authority and power to enter into the agreement
  • Notices: communications must be written and delivered properly

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