If you're running a business in Nevada, understanding workers' compensation requirements isn't optional—it's essential. Nevada takes workplace injury protection seriously, and the state has some of the strictest compliance rules in the country. Whether you're hiring your first employee or managing a construction crew, here's what you need to know to stay on the right side of the law and protect both your workers and your business.
When Does Nevada Require Workers' Compensation?
Here's the straightforward answer: if you have even one employee in Nevada, you need workers' compensation insurance. That's right—just one. Unlike some states that set higher thresholds or carve out exceptions for small businesses, Nevada's law is crystal clear. The moment you hire your first employee, coverage becomes mandatory.
This applies whether your employee works full-time, part-time, or seasonal. It doesn't matter if they're sweeping floors or managing operations. If they're on your payroll and not specifically exempt under Nevada law, they need to be covered. The only major exception? Sole proprietors working alone without any employees don't need to buy coverage for themselves, though they certainly can if they want the protection.
Who's Exempt from Nevada Workers' Comp?
While Nevada's requirements are broad, there are a handful of situations where coverage isn't required. Understanding these exemptions can save you money if your business structure qualifies—but be careful not to misclassify workers, as that's where many employers run into serious trouble.
Business owners have different automatic coverage rules depending on their structure. If you're a sole proprietor without employees, you're not required to cover yourself. Business partners are automatically excluded from workers' compensation benefits, though they can elect to be included by filing a D-44 form. On the flip side, if your business is a corporation or LLC, officers and members are automatically included in coverage. However, they can opt out by submitting a D-43 form to their insurer.
Other exempt categories include true independent contractors (with major exceptions in construction, which we'll cover next), licensed real estate professionals, volunteer ski patrollers who receive no compensation beyond meals and lift tickets, and sports officials working amateur events for nominal fees. However, trying to avoid coverage by simply labeling employees as independent contractors won't fly. Nevada law looks at the actual working relationship, not what you call it on paper.
Construction Industry: Special Rules Apply
If you work in construction, pay close attention here. Nevada has eliminated virtually all exemptions for construction work. All relationships on construction projects are considered employer-employee relationships under the law, regardless of how contracts are written or what labels are used. That means if someone is swinging a hammer on your job site, they need workers' comp coverage—period.
For prime contractors, this creates an important responsibility: you must ensure that all subcontractors maintain their own coverage. Why? Because if a subcontractor's employee gets injured and the subcontractor doesn't have insurance, the prime contractor becomes liable for those workers' compensation costs. This makes verifying certificates of insurance from every subcontractor not just good business practice, but financial self-defense.
What Happens If You Don't Have Coverage?
Nevada doesn't mess around when it comes to uninsured employers. The penalties are designed to be severe enough to make non-compliance financially devastating. If you're caught operating without required workers' compensation insurance, you'll face administrative fines up to $15,000. That's just the starting point.
Beyond the fine, the state can order your business to shut down until you obtain proper insurance. You'll also be hit with premium penalties calculated retroactively for the period you should have been covered. But here's where it gets really serious: if an employee suffers substantial bodily harm or dies from a work-related injury while you're uninsured, you could face criminal charges. We're talking potential jail time, not just financial penalties.
And don't forget, without insurance, you're personally liable for all costs related to workplace injuries. That means medical bills, rehabilitation costs, lost wages, and potentially permanent disability payments—all coming directly out of your pocket. A single serious injury could bankrupt your business and destroy your personal finances. The cost of insurance suddenly looks pretty reasonable by comparison.
The 2026 Payroll Cap Change You Need to Know About
If you've been doing business in Nevada for a while, you might remember the old $36,000 payroll cap. That's the maximum annual wage per employee that was used to calculate workers' compensation premiums. Well, that cap is gone. Starting in 2026, Nevada Senate Bill 317 eliminated it and replaced it with a new cap tied to annual state wage calculations.
The new cap is projected to hit $102,000 in 2026. That's nearly triple the old limit. For businesses with higher-paid employees, this means significantly higher workers' compensation premiums. If you employ skilled tradespeople, managers, or technical professionals earning above the old cap, expect your insurance costs to increase substantially. Now's the time to review your budget and adjust your financial planning accordingly.
How to Get the Right Coverage for Your Nevada Business
Getting workers' compensation insurance in Nevada is straightforward, but it pays to shop around. Nevada operates in what's called the voluntary market, meaning you can purchase coverage from private insurance carriers. Your premium will be based on your payroll, the type of work your employees do (called classification codes), and your claims history.
Start by getting quotes from multiple insurance carriers or working with an independent agent who can compare options for you. Make sure you accurately describe your business operations and employee roles—misclassification can lead to coverage gaps or surprise bills during audits. If you're in a high-risk industry like construction, roofing, or landscaping, expect higher rates, but know that maintaining a strong safety program and clean claims history can help reduce costs over time.
Once you have coverage, keep your certificates of insurance accessible and up to date. If you work with contractors or hire subcontractors, collect and verify their certificates before work begins. Document everything. Nevada's Division of Industrial Relations conducts audits and compliance checks, and having your paperwork in order makes those interactions much smoother.
Workers' compensation isn't just a legal requirement in Nevada—it's essential protection for your business and the people who work for you. The rules are strict, but they're also clear. Get covered before you hire, stay compliant as you grow, and treat your workers' comp policy as the business asset it is. Need help finding the right coverage for your Nevada business? Reach out to experienced insurance professionals who understand the state's requirements and can match you with the right policy at the right price.
