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Independent Contractor Classification

Calling a worker a '1099 contractor' doesn't make them one. Misclassification can cost workers overtime, minimum wage, unemployment, and benefits.

The economic reality test

Courts and agencies look at the whole picture: how much control the company has, whether the worker has real opportunity for profit or loss, the worker's investment in equipment, the skill required, the permanence of the relationship, and how integral the work is to the business.

Why classification matters

Employees get minimum wage, overtime, workers' comp, unemployment, and federal anti-discrimination protections. Contractors generally don't. Employers also pay payroll taxes for employees but not contractors — a major reason misclassification happens.

Common red flags of misclassification

Set schedule, required tools or uniforms, exclusive work for one company, ongoing relationship, performance reviews, training, and integration into the company's core operations.

Red flags to watch for

Required hours, location, and methods controlled by the company
Working full-time, exclusively, for one company for months or years
No real ability to take on other clients or set your own price
Being told you'll be 'a contractor for now, employee later'

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Severance Agreements & Releases