Today more and more companies are paying people as a private contractor to save on payroll taxes. If you are being compensated this way and you are showing up on site, reporting to someone then you are an employee of that company, which means you are entitled to more than you know. Most employees don’t realize the added expenses that a company has simply to pay an employee. Today with everyone trying to cut cost with the exception of the Federal Government one way is by avoiding that expense by paying you on a 1099 basis.
If you are working for a placement company like mine the people that I have working at clients sites are employees of mine and I cover those expenses. The company or client pays me more to cover those expense but what they are no longer responsible for is when the project ends you don’t effect their unemployment rate. Not only are these companies not paying for your payroll taxes they also are trying to avoid paying for your unemployment when you go to collect. What then happens is a field agent will be called to investigate the claim and that’s when these companies get hit up with the violation. And of course the ignorance runs a muck!
If I heard it once I have heard it a thousand times from employers telling me that in their line of work it is all good. What a joke! Here are some links that will help you.
http://www.irs.gov/businesses/small/article/0,,id=99921,00.html
http://www.payroll-taxes.com/articles/employee-contractor.html
http://www.legalzoom.com/everyday-law/workplace/employee-vs-independent-contractor-differences