Top 10 Signs You May Be Misclassified as a 1099 Contractor

There is an enormous amount of confusion, both by individuals and employers, regarding 1099 status. Many people mistakenly believe that the decision to classify someone as an employee or a contractor is solely at the discretion of the company with the work. And all those people would be wrong.

This is important stuff, as contractors carry more of their tax burden than their employee counterparts. Employees only pay half of their Social Security and Medicare taxes (FICA), while their employers pick up the other half. Contractors are burdened with the entire tax bill, including the state and federal income tax that is generally withheld weekly from employee paychecks.

The IRS has specific guidelines to help employers understand the difference between employees and contractors; but not all companies abide by the rules. So what are some of the top telltale signs that perhaps you are being misclassified as a 1099 contractor?

  1. You don’t submit a weekly or monthly invoice for your services.
  2. The guy you work for refers to himself as your boss.
  3. You have a specific schedule, are monitored by someone and are told when to take your lunch break.
  4. There are other people with whom you work that are doing the exact same job, but are classified as W2 employees.
  5. The company gives you a uniform and you are required to wear it.
  6. You drive a company vehicle.
  7. You have company business cards and a company email address.
  8. The company tells you when you can take vacation.
  9. You are using a computer provided by the company.
  10. The IRS calls and says, “We need to talk.”

We are not employment attorneys; if you have concerns regarding your employment status, we strongly suggest you speak to one or contact the Department of Labor in your state.

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4 Responses to “Top 10 Signs You May Be Misclassified as a 1099 Contractor”

  1. Cary Johnson says:

    I’m an over the road truck driver.
    The last company that I worked.for went out of business.
    Question 1. Can I be compensated
    For not telling me in advance to look for another job.
    2. Paid with a personal check.
    W2 or Contractor employee?

    • 10 til 2 says:

      Cary: 1) The company has no obligation to give you advance notice of neither your termination nor of them going out of business (sad, but true). You also had no obligation to give them advance notice had you wanted to quit. 2) I would always be wary of a business paying me with a personal check; but the most important question is whether you filled out a W-4 when you started working for the company (which would show that they considered you an employee). Keep in mind, we are not employment attorneys; for a definitive answer to your question we suggest you contact one or the Department of Labor in your state. Good luck to you.

  2. Joe Campbell says:

    I am an otr driver that gets a 1099 i also driver their vehicle they pay for all expenses. By reading this Iam assume this is illegal , is there anything I can do?

    • 10 til 2 says:

      Joe: Sometimes, it is not just one thing that determines classification. We suggest you contact the Department of Labor in your state for your answer. Good luck and keep us posted!

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