A Nevada independent contractor agreement spells out the terms and conditions under which an independent contractor will perform the services for the client.
The document protects the rights of the contractor and the employer so that the worker is not misclassified as an employee and denied any benefits they are entitled to.
- Worker Classification: ABC Test
- Tax Structure: No Income Tax
- Definition: § 612.085
- At-Will Employment: Yes
Independent Contractor Definition
Nevada law defines an independent contractor as a self-employed individual who works for a client without supervision or control over the work and for a set fee. The independent contractor sets their schedule and determines their own means and work method.
An employee is any worker who is not an independent contractor.
Worker Classification Test
Nevada law uses the IRS ABC test to determine the status of a worker. This test assesses three elements in an individual’s employment to decide if they are an employee or an independent contractor for purposes of taxes and unemployment insurance.
A worker is an employee unless the employer can show:
- The worker is free of control or direction over the work done by the terms of the contract and in the course of employment.
- The work done is outside the normal course of business for which the worker was employed.
- The worker is engaged in the same type of trade, occupation, or business as the work being done for the employer.
In other words, the worker cannot have been hired to perform overflow work or coverage for missing regular employees. They must carry out a unique task for the employer that the employer’s workers cannot do.
Rights and Responsibilities
Nevada Revised Statute 608.0155 creates a presumption that a worker is an independent contractor if they:
- Have or have applied for an EIN or SSN or have filed a tax return for business earnings in the previous year.
- Are required to hold a state or local business license.
- Meet the ABC criteria as noted above.
- Are able to work for more than one principal unless contractually obligated not to.
- Provide substantial capital investment in their own business.
This relieves the employer of certain responsibilities and duties toward the worker. However, it also creates a duty to the employer to avoid misclassifying the worker as an independent contractor to avoid paying taxes or providing benefits.
A written contract stating a worker is an independent contractor does not create a presumption that the worker is, in fact, an independent contractor without meeting the requirements in NRS 612.085 [1] .
State Taxes
Nevada does not have a state income tax. Independent contractors must pay federal income taxes and any applicable business taxes.
Filing for Unemployment
Independent contractors and self-employed workers may not file for unemployment. However, workers should be certain if they are employees or independent contractors.
Not all 1099 workers are independent contractors. If you have questions, you should contact the Nevada Office of Labor.
Compensation for Work Injuries
Nevada Revised Statute 616B.603 exempts independent contractors from coverage by workers’ compensation.
NRS 616A.495 requires employers to provide evidence of coverage for all workers and proof that workers are properly classified under penalty of closure.
Sample
Below, you can download our free Nevada independent contractor agreement in PDF or Word format:
