Nevada Independent Contractors laws & HR compliance analysis

Nevada Independent Contractors: What you need to know

Whether a worker is an “employee” or an “independent contractor” is critical when it comes to such important issues as pension eligibility, workers' compensation coverage, wage and hour law, and many other matters. In some situations, federal law will govern, but the question is most often resolved by looking to state law, particularly in areas such as unemployment tax liability, workers' compensation, and state wage and hour requirements.
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A 2019 Nevada law (Senate Bill 493) contains four key elements related to the classification of workers:
• The law creates a conclusive presumption, applicable only to building contractors, that a licensed contractor or subcontractor is properly classified as an independent contractor if (1) he or she is free from control over the performance of his or her services, (2) the services are outside the scope of activities the hiring business usually offers (or performed away from its usual locations), and (3) the individual is performing the service as part of his or her independently established business.
• The law provides for penalties of up to $5,000 per employee as well as damages such as lost wages, lost benefits, and other economic damages if workers are misclassified.
• The law creates a governor-appointed task force dedicated to evaluating and proposing new legislation, to ensure the penalties for misclassification remain an effective deterrent.
• SB 493 creates additional potential liability when it can be shown that an employer coerced, misrepresented, or fraudulently required individuals to be classified as independent contractors or to form a business entity to classify them as independent contractors.
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