Top 10 Signs You May Be Misclassified as a 1099 Contractor

By Gina Beckman

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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39 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!

    • Emma says:

      I owned a flatbed company and also filed 1099 on employees only because I knew no better my father did this for years with his company, but unless you lease the truck and pay for fuel, tarps, chains, repairs etc., then no per a conversation with the IRS myself your employer is doing something illegal!

    • Emma says:

      Joe, I owned a trucking company and was told by the IRS in Orlando Florida that I or any other company cannot 1099 a truck driver unless that driver is leasing on AND paying for their own fuel, tarps, chains, binders, repairs, etc. Hope this helps!

  3. Jesus says:

    Hello I am looking into becoming a cable tech. Subcontractor for a major company. They are going to 1099 me and w4 also. What would be a good way to find out how much taxes I need to pay. I would like to pay quarterly.

  4. J.D.L. says:

    I work for a limo service but we don’t drive limos, we drive sedans and full size suv. Anyways this is my first 1099 job. I am required to dress up in a suit, be at the office at 6am-6pm m-f. Owner gets mad I won’t work weekends or things come up where I can’t. I’m a single mom. I was promised pay every Friday. I’m two weeks late getting paid now. And if I’m not at the office at his beck and call I get bad jobs or nothing at all. I watch this guy buy a car out of state for 5 k and he can’t pay me? Is this how being a 1099 employee is? I’m putting in 60+ hours a week for the bare minimum of 180 a week to 600 at the best. granted the work is easy but the hours SUCK. And the longer I stay the more I feel like a employee. Any opinions?

    • 10 til 2 says:

      J.D.L.: To help determine whether individuals qualify as contractors or employees, the IRS has a form called the SS-8; you can find it on the IRS website at http://www.irs.gov/pub/irs-pdf/fss8.pdf

      It sounds like you have some other major issues and concerns regarding this job; and to address these we strongly suggest you contact an employment attorney (which we are not) or the Department of Labor in your state. Best of luck to you.

  5. mb says:

    I work for a pair of business partners at an interior design company. They hired me as an “independent contractor” and I receive a 1099 once a year from them. They claim to allow me to set my own schedule, but when I started they asked if 10am-4pm Monday-Thurs would work for me and i said yes. That has been my schedule ever since and I have to be in the office at my desk during those hours. Also I have an in-office voicemail box, they provide me with business cards that have my name on them as part of their company, I use the computer they provided me at my desk and hooked me up to an email account in their server, etc.
    Am I in some sort of “gray area” of W-2 vs 1099 because I don’t work 40 hours a week?

    Thanks for any help.

    • 10 til 2 says:

      mb: There is no grey area. Employment status is not contingent on the number of hours you are on the clock, but rather on the control that the employer has over you and your work. If we were to guess, we would bet you have been misclassified as a 1099; however, we are not employment attorneys so we suggest you speak to one for a definitive answer and to learn about your options. As it stands now, you are working part-time and responsible for your entire tax burden; you might be well-served by looking further into this. Good luck and keep us posted.

  6. william says:

    Im a schedualed employee and the company that hired me did not give me the option of 1099 they just had me sign it, is that legal?

  7. Marianne says:

    I am a nurse that works for a chain of senior nursing facilities. I have not worked there a year yet so not sure if I will get w2 or not. I was hired under the title “per diem” even tho I was hired to work 30hrs or more a week, sometimes I even work 50-60hrs a week but don’t qualify for any benefits due to their policy of having the title “per diem”. Not sure if this is legal. In our hands book it states that per diem works work less the 20hrs a week.

    • 10 til 2 says:

      Marianne: Did you fill out a W4 when you were hired and have they been taking taxes out of your checks? Sounds like you have some good questions for an employment attorney or the Department of Labor in your state. Good luck to you.

  8. jeannie says:

    I work for a home health care agency, where people are hired under 1099′s to work with clients in the field who need help at home, however I work in the office. The aides that go out are told which clients to go to, what times they are to be there and what they are to do, and they have a nurse director over them telling them what they are to do. I work in the office and have a schedule of 10-3 mon – fri and we are all told what type of dress code we are to wear, and have to you office equipment and Microsoft office on the computers for billing and payroll. I also get a 1099 misc. form should we be getting w2′s instead.

  9. Katherine says:

    My husband is a commercial diver for a company. He was signed on as an independent contractor. He has to be at the shop mon-fri 8-4, uses the company’s boats, equipment, trucks, and computers to do his job. He has an provided by the company. He is also on call 24/7 and on a salary pay.

    • 10 til 2 says:

      Katherine: Just guessing here, but we bet the workers’ compensation insurance would be astronomical in that line of business — which may or may not account for the company’s decision to classify their divers as contractors. Is your husband being misclassified? We don’t know. But it is probably worth looking into further. We suggest you speak with an employment attorney or the Dept of Labor in your state. If he is being misclassified, he has options on what to do next. We suggest reading this article from the AFL-CIO website entitled “Recourse for Employees Misclassified as Independent Contractors.” Good luck to you and your hubby.

  10. Chris Abram says:

    I work for a carwash in California and I was hired by the owner to wash vechiles and we have a dress code plus he provides all the equitment to wash and detail the vechiles. I also have a verbable work schecule 9 to 5 he stated as a 1099 employee he can have it in writing. He hired me at $9.00 a hour. He takes the tips. He also tells us when to take lunch. He taught me how to do car washes and detail work by this information I should be a W-2 employee I’m guessing.

  11. sonya taylor says:

    my husband works for a company and is considered a sub contract laborer, they pay him a paper check,but do not with hold taxes… and we recieved a 1099 will we have to pay taxes on his pay for this???

    • 10 til 2 says:

      Sonya: Yes.

      We are neither attorneys nor accountants; and nothing in these comments should be construed as legal advice.

  12. stacey says:

    I am working out of my home with my own hours but the company I am contracting with wants me to punch in and out on a time clock via the internet?
    wouldn’t this make me an employee?

    • 10 til 2 says:

      Stacey: Being considered an employee usually involves more than just a single aspect of the job; and we are simply not sure whether the act of punching in and out on a time clock in and of itself would be the determining factor in employment status. We suggest you check out the “Independent Contractor or Employee” page on the IRS website. Good luck.

  13. Gena says:

    My husband is classified as a 1099 independent contractor but the company he does work for pays him an hourly wage, makes him turn in his hours (he is on payroll, he does not bill them for this service), provides the equipment and software to do the work on, and gives him direction on what work to perform. He could not perform this type of work without their provided equipment and software. Seems to me he is an employee.

  14. josh says:

    Myself and another I work with were both hired last year as movers and were being paid “under the table” by check for the time being. The company which is a startup begun paying us by direct deposit roughly 6 months after. We then signed a contract which states we are independent contractors and are paid so much monthly for the specific work provided ‘on-call’. The problem is that according to the standards in determining the employer-employee relationship by the DOL and the IRS we are technically in my opinion considered independent contractors. We have both brought this to their attention ok multiple occasions yet they still call us contractors. What would be the proper course of action if we were to go that direction in making things right..?

    • 10 til 2 says:

      Josh: Congrats on taking this on; many workers feel helpless and remain idle even when they are certain they are being misclassified. You might want to take a look at this fact sheet from the AFL-CIO that explains some of your options. Best of luck to you and keep us posted.

  15. Chris says:

    I work for a family business in the health food nutritional and Bodycare field. I have a territory of stores which requires me to visit them, sell to the , merchandise and fill out promo paperwork. My mother who is retired owns the business and it is classified as a DBA. Since 2004, my brother has taken over as “president” of the company, meeting with vendors and telling the reps what needs to be done for the month. My brother receives the commission checks himself ( based on a percentage of sales) , and puts money in the business acct, but also moves money into his personal acct. this personal acct is used to pay the 5 employees a salary each month, myself included. I have always been told I am 1099 and I pay for my own health insurance and income taxes/ social security. I have recently learned that I may not be 1099 after all due to the statements mentioned above. My brother receives the commission checks personally, and I do not see those vendor commission checks or have access to them. My check every month is based on a set salary written out of my brothers personal acct.
    Am I still classified as 1099, as I have been told by my brother and my mother before him. All other employees are 1099 as well.

    Thanks

    • 10 til 2 says:

      Chris: We don’t know the answer to your question; but we would consider paying you and other workers from a personal account as a massive red flag. We urge you to contact an employment attorney, which as you know by now, we are not. Good luck and keep us posted on how this unfolds!

  16. Cakes says:

    I have been miss classified as an independent contractor vs employee. I was deemed an employee by the local dept of labor after filing for unemployment.

    Now I am trying to amend my 2013 tax return. I was given a 1099. And already am filing a SS-8, and plan to file an 8919 as well. However, how do I amend the income portion??? Or do I not?! I’d like it to be known to the IRS that it should of been reported on a w2 vs 1099 if there is any chance of getting even the slightest tax return for SE taxes I should of not been paying.

    Any advice?

    • 10 til 2 says:

      Cakes: We suggest you call the Department of Labor back and ask them for clarification as to how to proceed. Best of luck to you.

  17. Ryan says:

    I was recently hired by a horse trainer to clean stalls, feed, turn out horses and the odd occasional repair. The job add stated that it was a Salary job ($300 for 5 days, $350 for 6) and at the time of the interview I was told that the day usually lasted about 5 hrs. I’d been out of work for a while after being laid off and having trouble finding work and this sounded somewhat reasonable (in my head I was thinking it worked out to about $10/hr). Also at the interview I was told that I would be classified as a 1099 worker (something I’ve never dealt with before) and in my ignorance, said “sure”. The problem arose when those 5 hr days were on average 10 hr days (work day is done when all the stalls, feeding, general cleaning etc. is done). I’m told they’re flexible with hours, but generally expected to be there at 7:30am, starting any later would have me working into the night. Basically I’m just wondering if I’m getting screwed? My first week of 5 days Tue-Sat was nearly 50 hrs, basically $6/hr in my book. Any advice would be helpful.

    • 10 til 2 says:

      Ryan: The answer to your question depends on whether you are comfortable working manual labor at a contract job for $6/hour (which incidentally is below the national minimum wage). Another thing to consider is that if you get injured on the job, as a 1099 contractor, you are in all likeliness not covered by Workers’ Comp. Plus you are working for someone who you believe may have been less than forthcoming with you. Best of luck to you on whatever you decide to do. Please understand that we are not attorneys; if you need legal advice, we urge you to speak with one.

  18. duke says:

    I am a 1099 worker, but I basically work for a beverage company. I drive for them all the time, setting up events and doing deliveries. (All in my own truck)they pay me 55cents per mile plus an hourly wage of 20$ ph. At first they paid me for the driving time but now they are telling me that the 55cents per mile should compensate for the driving time, But it doesnt its for gas and wear and tear on the car. They said if I’m just setting up the event and leaving I can only log 2 hours for that, but sometimes with LA traffic it can take much longer For me to get everything done and I don’t feel it’s fair to have me out of the house for 4+ hours when I’m only getting paid for 2. Another exp.- I had to transfer beverages between 2 storage units today and was out of my house (using my own truck) for 3 1/2 hours. Is it legal for them to only pay me for 2 hours? Citing that the milage pay should compensate the extra time although that’s not it’s purpose? Also when I work an event 5pm-9pm they are telling me I can only log those 4 hours and not the time I spent picking all the stuff up from storage, transporting it, unloading it to set up and then after the event break it down and transport it back to the storage unit. Is that legal??? If I keep logging my drive time and they fire me can I file a wrongful termination lawsuit? Or maybe violation of labor laws?

    • 10 til 2 says:

      Duke: You have some very valid questions; however, we are not employment attorneys. We strongly urge you to contact one. Best of luck to you.

  19. anne says:

    My employer has reclassified me as an independent contractor. I do not supply my own cleaning supplies, they own the cleaning company and have the contract with the business I clean. Am I an employee?

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