Labels do not decide employment status; economic reality does. This checker screens your 1099 relationships against the factors that actually get weighed, then estimates what the exposure looks like if a contractor is really an employee.
This tool screens risk using the general FLSA economic reality framework. It is not legal advice and does not determine any worker's status; the IRS, state agencies, and courts apply their own tests, and misclassification questions with real dollars involved need professional review.
Under the FLSA, employment status turns on economic reality, not labels or contracts: whether the worker is economically dependent on the employer or genuinely in business for themselves. The weighed factors include control over the work, opportunity for profit or loss, the worker's investment, permanence, how integral the work is to the business, and skill and initiative. This checker scores those six.
A misclassified contractor generates simultaneous exposure streams: unpaid overtime (contractors got no time-and-a-half), the employer share of payroll taxes, potential benefits-plan claims, unemployment and workers' comp premiums, and correction costs. The estimate here models the two largest, overtime and payroll tax, as scenario math.
A signed contractor agreement is worth having, but it cannot convert an employment relationship into a contractor one. Agencies look at the actual working relationship; a generic agreement contradicted by daily reality can even hurt, by showing the employer knew the classification question existed.
No. Workers cannot waive employee status, and their preference is not a factor in the test. The request is common, and so is the later wage claim from the same worker after the relationship ends.
Full-time, indefinite, single-client work that is core to your business, under your direction, with your equipment. That pattern fails nearly every factor at once, and it is exactly the profile agencies and plaintiff's attorneys screen for.
Most commonly from an unemployment claim filed by a former contractor, which triggers a state review that can expand to everyone similarly classified, then cross-refer. One worker's claim routinely becomes a workforce-wide look-back.
Prospectively: convert the role, set up payroll, and document the change. The look-back, whether and how to correct past periods, has tax and legal dimensions that need professional guidance, including federal voluntary settlement options.
Book a no-cost 30-minute consult. Bring your result, and leave with a straight read on the risk and a practical next step.