Do you hire employees or independent contractors? The answer is probably both.
Employers routinely consider a number of factors in whether to hire an employee or an independent contractor as their business grows. It is important for businesses to be able to explain why the “independent contractor” the company just hired is actually an “employee” under the law or vice versa. SB 224, recently passed by the Nevada legislature and signed by Governor Sandoval went into effect on June 2, 2015. This law provides much more clear guidance on what qualifies for “independent contractor” status and what doesn’t. SB 224 creates a conclusive presumption that an individual is an independent contractor for Nevada wage and hour claims if certain conditions are met.
This is yet another list of “factors” that business owners and their respective counsel must become familiar. Of potentially greater importance will be determining which law will apply and when. There is a different test in determining the employment classification of a person in each of the follow circumstances: (1) wage and hour claims under Nevada law; (2) wage and hour claims under federal law; (3) workers compensation claims; (4) and unemployment claims. It is entirely possible that under the wage and hour law in Nevada an individual could be considered an independent contractor, but if terminated, the individual could file for unemployment and be classified as an employee.
While some of the factors in each test overlap, using all the factors in each test will, in many cases, result in different classifications for the same individual. It is now more important than ever to consult your legal counsel to protect your business so that you can properly structure job descriptions for your employees and/or independent contractors to benefit your business as well as plan for the changes in classification that may occur in the event of injury (worker’s compensation claims) or termination (unemployment claims).
If you need more information or have any questions regarding how the new law may affect your business, do not hesitate to contact Incline Law Group, LLP for some clarity on the subject.