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SESK: Stuff Everyone Should Know · sesk.info/founder-label-or-1099-does-not-decide

You pay a worker on a 1099 and they sign a contractor agreement. Does that make them a contractor under the FLSA?

No. The real working relationship decides, not the label or the paperwork.

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  1. No, the real working relationship decides ✔
  2. Yes, a signed agreement settles it
  3. Yes, if you file a 1099 every year

Why: The Labor Department says what a worker is called does not matter, and getting a 1099 or signing a contractor agreement does not make someone a contractor. The economic facts of the job decide.

Huh, didn't know that: Under the FLSA, independent contractors get no minimum wage or overtime protection, which is why the label gets checked closely.

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Why did the contract feel confused? Everyone kept saying it was just a formality.
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References

Answer: No, the real working relationship decides. The Labor Department says what a worker is called does not matter, and getting a 1099 or signing a contractor agreement does not make someone a contractor. The economic facts of the job decide.

  1. DOL WHD Fact Sheet 13: Employee or Independent Contractor Classification Under the FLSA www.dol.gov/agencies/whd/fact-sheets/13-flsa-employment-relationship
    A worker who is paid off the books or receives a 1099 is not necessarily an independent contractor
    Checked 2026-10-11.
  2. DOL WHD Fact Sheet 13: Employee or Independent Contractor Classification Under the FLSA www.dol.gov/agencies/whd/fact-sheets/13-flsa-employment-relationship
    a worker may be an employee under the FLSA regardless of the title or label they are given
    Checked 2026-10-11.

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