What exactly is a 1099 employee?

Get Legal Help Today

 Secured with SHA-256 Encryption

What exactly is a 1099 employee?

I’m looking to hire a few people to do work for a LLC company that I just
started. Since I just started and dont really have an good income yet I’d like
to hire them as a 1099 employee. What should I have them do before they can
legally do work for me? What can I require or request of them?

Asked on February 1, 2017 under Employment Labor Law, Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

There is no such thing as a 1099 employee. Either you are an employee (and have taxes withheld; receive benefits; and receive a W-2) or you are an independent contractor receiving a 1099. Note that most people called "inpendent contractors" or "1099 employees" are not--they have been misclassified by their employer and really employees (and need to be paid, etc. as employees).
It doesn't matter what you call them or what forms they fill out: if a person meets the criteria to be an employee, they are an employee. You can find the full criteria on the U.S. Dept. of Labor website or the IRS website, but in brief, if you manage how they do their jobs, if you exercise control over their hours or location, if you provide their tools, equipment, etc., if they can't lose money while working for you (e.g. spend more on their "business" costs then they earn) but are guaranteed to profit (by no matter what, netting positive on pay), etc., they are an employee. They don't have to meet all these criteria to be an employee, but the more of them they do meet, the more likely they are to be an employee. The most important is control--if you exercise control over them, they are an employee.
Example: I used to work in publishing. If we hired a graphic artist to work onsite, during the hours other staff or management was around, and could direct them how to do their job, they were an employee. The same graphic artist, if she worked at home, on her own hours, using her own computer, and was sent a Word file which she turned into a laid-out book for us without a manager looking over her shoulder, would be an independent contractor (1099). 
If you misclassify workers, you could potentially be held liable for all the taxes, benefits, overtime (if applicable), etc. you should have paid them.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption