If I own a company and want to hire some employees, as long as I sponsor them can they be either w2 or 1099?

UPDATED: Aug 30, 2011

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If I own a company and want to hire some employees, as long as I sponsor them can they be either w2 or 1099?

Asked on August 30, 2011 New Mexico


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

It's not clear what you mean by "sponsor" them--are you talking about employing people who are not U.S. citizens? If so, speak with an immigration attorney--the rules are very complex.

More generally: you can use independent contractors (1099 workers) instead of employees (W2), BUT they must truly be independent contractors--they can't be employees you call or pay as independent contractors. If you go to the U.S. Department of Labor (DOL) website, you can find information about the disintinction between independent contractors and employees; the short answer is, if you control the hours of employement, how they do their job, where they do their job, and they are not economically independent of you (e.g. no other clients; don't advertise their own services to potential customers; don't provide own equipment), then they are almost certainly employees and must be paid as such.

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