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1099 vs W-2 workers8 min readIntro

When to hire a W-2 employee vs a 1099 contractor

Practical scenarios and questions to ask before you choose—control, schedule, tools, and whether the work is part of your core business.

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Educational only · Last reviewed May 30, 2026

Questions to ask

  1. Control — Do you direct when, where, and how the work is done?
  2. Integration — Is this role core to your everyday operations?
  3. Tools — Do they use your equipment on your premises full time?
  4. Exclusivity — Are they barred from working for competitors?
  5. Duration — Ongoing indefinite work vs a defined project?

More "yes" answers on control and integration → W-2 is more likely appropriate.

Example scenarios

ScenarioTypical treatment
Front desk receptionist, your hoursW-2 employee
IT consultant, 3-month server migration1099 contractor
Stylist renting booth, sets own pricesOften contractor (facts matter)
Delivery driver, your truck, your routeUsually W-2

California may reach a different conclusion than federal law—apply the ABC test.

Checklist before first payment

  • Written scope of work
  • W-9 collected (contractor) or W-4 (employee)
  • Payroll setup for W-2; workers comp if required
  • Professional review if unsure

Good practices

Changing someone from 1099 to W-2 mid-year is painful. Decide up front and document why.

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