1099 Contractor or Employee? Why It Matters for Nevada Workers' Compensation

A common misconception among Nevada business owners is that if someone is paid on a 1099, they are automatically considered an independent contractor.

For workers' compensation insurance, it isn't always that simple.

Insurance companies look at the actual working relationship - not just how the person is paid. Some of the questions that may matter include:

• Who controls when and how the work is performed?
• Does the worker use their own equipment?
• Do they work for other businesses?
• Is the work part of the normal operations of the company?
• Does the worker carry their own workers' compensation insurance?

This becomes particularly important at the end of the policy year when the insurance company performs its workers' compensation audit.

A Las Vegas business may begin the year assuming certain workers are independent contractors, only to have the insurance company include some of those payments as payroll during the audit. That can result in a significant additional premium.
The important takeaway: issuing someone a 1099 doesn't necessarily settle the workers' compensation question.

If your Nevada business regularly uses subcontractors or independent contractors, it is worth discussing the arrangement with your insurance agent before the audit rather than after you receive an unexpected bill.

Blue Sky Insurance works with businesses throughout Las Vegas and Nevada on workers' compensation insurance and audit questions.
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Written By:
Stephen Miller/Agency Owner
Blue Sky Insurance Group