Can my employer legally pay me as a 1099 independent contractor?

I hear this question all the time - mostly from employers.  There is multi-point test promulgated by the IRS (IRS Form SS 8) and a version of that test promulgated by the Texas Workforce Commission(TWC Form C8).  Check these out on their websites and compare them to your own situation.  In short, there is no such thing as a 1099/Contract employee.  If the worker is an integral part of the employer's operations and if the employer exercises day-to-day control over the employee, the employee is likely a W-2 employee.  If the worker is not part of the employer's regular operations or the worker works independently setting his own schedule, employing assistants and purchasing materials as need be and is paid by the job with a possibility that he could profit or lose money on the deal, then he might be an independent contractor.  Many employers intentionally misclassify employees as independent contractors in order to avoid, legal obligations to pay benefits, overtime, employer taxes, unemployment taxes, workers comp and overtime.  The short-term financial incentives are significant.  The long-term risks are enormous and the potential liability is often a company-killer.  if you believe you have been misclassified as an independent contractor and you should have been classified as an employee, you could choose to complain to a government agency or a court, depending on what losses you have suffered as a result of the misclassification.  If you were worked overtime (more than 40 hours per week) and were not paid 1.5 times your hourly rate for the overtime hours, you could complain to the US Department of Labor/Wage & Hour Division or the courts through an attorney.  If you were denied employee benefits (401k, Health Insurance etc.), the Department of Labor may also take your complaint.  If you were fired, be sure to explain your belief that you were actually an employee when you apply to the TWC for employment benefits.  If you just want the problem fixed, a complaint to the IRS may trigger an audit.