Are you really a 1099 contractor, or a W-2 employee your boss is dodging taxes on?
For workers paid on a 1099, paid cash, or told 'you're a contractor' without a real say in how, when, and where they work.
Sound familiar?
- “A GC wants to pay you 1099 but tells you when, where, and how to work, and you're not sure that's legal.”
- “You're bringing on help and don't know if they should be a 1099 contractor or a W-2 employee.”
- “You've heard misclassifying a worker can mean back taxes and penalties, and you want to stay clean.”
What this tool does
Runs through the factors the IRS (behavioral control, financial control, relationship) and the Department of Labor use to decide employee vs contractor, and gives you a reasoned answer with the factors that pushed it. Some states use a stricter ABC test. This is a plain-English guide, not an official determination (that's IRS Form SS-8).
If you take an action based on what you read here, that action is yours. We are a guide, not an advisor, and we give this away for free.
General guidance, not legal advice. For your situation, talk to DOL, free: 1-866-487-9243, www.dol.gov.
What the law actually says
- •The IRS uses a common-law test across three areas, behavioral control, financial control, and the relationship, to decide if you're an employee or an independent contractor. No single factor settles it.
- •The Department of Labor applies an 'economic reality' test under the FLSA for wage and overtime rights. Several states (California, Massachusetts, New Jersey and others) use a stricter 'ABC test' that presumes you're an employee unless the business proves otherwise.
- •Being paid on a 1099 or called a contractor doesn't make it so. If the reality is employment, you may be owed overtime, unemployment insurance, workers' comp and the employer's share of payroll taxes.