1099 Contractor or Misclassified Employee: Where I-9 Duties Begin
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Reviewed & verified by A. Jason Velez, Esq.*
Founding Attorney, 1LAW · Last reviewed September 23, 2026
Legal Inquiry
Consumer Legal Issue
Where is the line between a legitimate 1099 relationship and a misclassified employee that would trigger I-9 obligations?
Attorney Answer
The label does not decide it. For I-9 purposes an independent contractor is one who carries on an independent business, contracts 'to do a piece of work according to their own means and methods,' and is 'subject to control only as to results,' determined 'on a case-by-case basis' regardless of what the person calls themselves (8 C.F.R. § 274a.1(j)). The regulation's factors: who supplies tools and materials; whether the person offers services to the public and works for several clients at once; whether they have an opportunity for profit or loss; whether they invest in facilities; and who directs the order, sequence and hours of the work. A true contractor is its own employer for I-9 purposes (§ 274a.1(g)) and completes I-9s for its own crew; an individual who is really your employee triggers your verification duties. Even a genuine contractor cannot be used knowingly to obtain unauthorized labor (8 U.S.C. § 1324a(a)(4)).
The Tenth Circuit, in striking an Oklahoma law that tried to make hiring businesses withhold from contractors, confirmed the federal line: 'requiring verification for employees but not for independent contractors' (Chamber of Commerce v. Edmondson). Tax, wage-and-hour and workers' compensation laws use their own tests, so a worker can be a contractor for one purpose and an employee for another.
Cases Cited
Published decisions relevant to this issue, provided as legal background rather than advice about any particular case.
- Chamber of Commerce v. Edmondson, 594 F.3d 742 (2010) — U.S. Court of Appeals for the Tenth Circuit
Federal law requires verification for employees but not for independent contractors.
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Frequently Asked Questions
Does a 1099 or an LLC make a worker an independent contractor for I-9 purposes?
No. The test is case by case and ignores labels: whether the person runs an independent business, works by their own means and methods, and is controlled only as to results.
What factors decide contractor status for I-9 purposes?
Who supplies tools and materials, whether the person serves the public and several clients, whether they risk profit or loss, whether they invest in facilities, and who directs the order, sequence and hours of the work.
If someone is a true contractor, who completes the I-9s?
The contractor, for its own crew. It is its own employer for I-9 purposes, but even a genuine contractor cannot be used knowingly to obtain unauthorized labor.