Running a business in Nevada often means wearing many hats—manager, accountant, and sometimes, legal researcher. When it’s time to grow, deciding whether to hire someone as an independent contractor or an employee can be confusing. It’s not just a business decision—it’s a legal one. Misclassification can lead to serious financial and even criminal consequences under Nevada and federal law.
If questions about worker classification have led to legal trouble or criminal charges, contact our legal team today or call (775) 406-9595 for immediate help. Acting early can make a significant difference in protecting both your rights and your business.
Understanding the Difference Between Independent Contractors and Employees
An employee works directly for a business and is under the company’s control—the employer determines work hours, job duties, and supervision. On the other hand, an independent contractor is self-employed and typically controls how and when they do their work.
A quick comparison
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This may seem simple, but many Nevada businesses get it wrong—often unintentionally.
Why Classification Matters
Misclassifying a worker isn’t just an accounting mistake. It can lead to:
- Tax penalties from the IRS and the Nevada Department of Taxation
- Unpaid benefits or back wages if someone is wrongly treated as a contractor
- Civil fines and potential criminal charges if authorities view it as deliberate misclassification
These issues can quickly escalate for small-business owners already facing legal scrutiny. Taking proactive steps to clarify worker status can prevent further complications.
How Nevada Determines Worker Status
Nevada follows both federal and state guidelines when deciding whether a worker is an independent contractor or an employee. Authorities look at the degree of control a business has over the person performing the work.
Here are the main factors considered:
- Behavioral Control – Does the business dictate how, when, or where work gets done?
- Financial Control – Who provides the tools or covers expenses? Does the worker have a chance for profit or loss?
- Relationship Type – Is there a written contract? Are benefits offered? Is the relationship expected to continue indefinitely?
No single factor decides the outcome. The overall picture of the working relationship determines how the law classifies it.
Red Flags That Could Lead to Legal Trouble
Even well-meaning business owners can make mistakes that raise red flags for investigators. Common warning signs include:
- Paying someone “under the table” without documentation
- Calling someone a contractor but giving them set hours and supervision
- Using one “contractor” for years without a written agreement
- Providing equipment, training, or benefits to a “contractor”
State and federal agencies may launch an audit or investigation when these patterns appear. If misclassification is found, it can trigger criminal charges, including tax-related offenses or fraud allegations.
Steps to Protect Your Business
Every Nevada business owner can take simple, smart steps to stay compliant:
- Use written agreements that clearly define independent contractor relationships.
- Keep detailed records—invoices, payments, and correspondence.
- Avoid directing how the contractor performs their work. Set goals, not methods.
- Consult a qualified business attorney when unsure about a worker’s classification.
Learn more about the firm’s business law guidance here.
Taking these actions early safeguards your business and can demonstrate good faith if legal questions arise later.
What to Do If You’re Facing Charges
Being accused of misclassifying workers or violating labor laws can be overwhelming. The process is stressful, especially when criminal charges are involved. But you don’t have to face it alone. A knowledgeable defense team can evaluate the evidence, explain your options, and work to protect your rights.
If you’ve received a letter from investigators, been contacted by law enforcement, or already face formal charges, don’t wait to get legal help. Early action often leads to better results.
Las Vegas Business Attorney
Worker classification issues can quickly spiral into criminal allegations that threaten your livelihood and reputation. If you’re under investigation or facing charges related to hiring independent contractors versus employees, reach out to Flynn Law Group now.
Call (775) 406-9595 or use our online contact form to schedule a confidential consultation. Our team helps Nevada business owners protect their rights and move forward clearly and confidently.