Employees or independent contractors
Classification of workers has long caused confusion and been an area of concern for businesses. Because independent contractors work for themselves, they are not covered by tax and employment laws in their work for businesses. Because of the costs associated with employees and the labor and other legal requirements, employers are often tempted to label as many workers independent contractors as possible. Even consent by the worker or a written contract calling someone a contractor is not enough; instead, the law determines who is an employee.
It is a good idea to review job responsibilities and control exerted over your workers from time to time to ensure compliance. Worker misclassification is an area of emphasis at this time for many state and federal enforcement agencies. Much better to review your own workers than to have the IRS do it for you after you have issued 1099s for several years.