Click to Print

What's the difference between an employee and a 1099 contractor?

Can an employer call you an employee when they provide all of the job materials then 1099 you?
Nina Kaufman answered September 24, 2009
URL: http://www.entrepreneur.com/answer/221989
Employers like to skate along the edge of the employee/contractor divide because, frankly, 1099 contractors are cheaper. Employers don't need to pay employment taxes, provide benefits or overhead/supplies for 1099 contractors.

1099 contractors are independent business owners (even if they are sole proprietors) who provide services on a contract basis. They tend to have a number of clients, make their own business decisions and hours, and supply their own tools and materials to get the job done. They are fully responsible for paying their own employment taxes.

However, if you work solely for this one employer, work at the employer's premises, and get all of the materials and tools from the employer, then it's more likely that you are an employee and should not be called a 1099 contractor.

If you are an employee, the employer should be withholding and paying in the appropriate federal, state and local taxes on your behalf. The issue is not whether you're "called" a 1099 contractor, the issue is the amount of control the employer has over the how, where, when and what of your work.

You may want to consult with a local employment lawyer to make sure you're getting all you're entitled to.

Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.