Independent Contractor Agreements

Independent Contractor Agreements

Many companies desire to contract around the burdens of employment by entering into independent contractor agreements. This can be a smart business strategy that reduces costs, increases efficiency, and improves job performance by shifting risks and incentives to independent contractors. However, what a company calls the relationship with its employee/independent contractor is not a significant legal consideration. Courts instead look to the degree of control exercised over the service provider by the employer. At common law, this was called respondeat superior however Nevada has codified these factors as NRS 608.0155. In any question regarding the status of an independent contractor, court are directed to look at (1) whether the independent contractor has filed income taxes for self-employment, (2) whether the independent contractor is required to hold a state or local business license to perform contracted for services, (3) whether the independent contractor has control over the means and manner of performing the work contracted for, (4) whether the independent contractor has control over their scheduling, (5) whether the independent contractor is required to work exclusivity for the employer, (6) whether the independent contractor may hire its own employees to perform services, and (7) whether the independent contractor must use their own tools, materials, or equipment to complete contracted for work. It can be expensive for the company that presumes the existence of an independent contractor relationship without consulting with an attorney. A wrong decision can lead to wage and hour claims, overtime claims, claims for unpaid employment taxes, and other penalties.

We take the time to craft independent contractor agreements that provide clarity and significantly decrease the likelihood that your company will be subject to claims that your independent contractors are employees.