Can an employer hire someone as an independent contractor (i.e. on a 1099) for a set period of time (i.e. 4-6 months) to see if they are the right fit for the employee, to try them out? The agreement/contract would state that if after the time period, it is determined they are the right fit, they will then be hired as an employee (W-2 with benefits). This means the employer will have heavy influence in directing their behavior and giving instructions. The person would be free to have other clients but would be expected to work 40 hours/week per the contract. The contract would also state that either party, the employer or the 1099 contractor, could end the contract at any time.
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As you may know, the employee vs. independent contractor determination is a very fact-specific test. (More info here: http://hr.blr.com/analysis/Compensation/Independent-Contractors)
In general, the more control an employer exerts over a worker, the more likely it is that a court will determine the person is actually an employee vs. an independent contractor.
In the scenario you’re proposing, you note that the employer would initially have “heavy influence” over the person. The person would also be required to work a 40-hour week. Finally, the person (if I understand you correctly) would be doing essentially the same work both as an “independent contractor” during the trial period and as an employee later on.
All of these factors would weigh heavily in favor of a finding that the person was an employee during the entire working relationship, regardless of what the preliminary period was termed on paper.
Additionally, the arrangement you’re proposing may also put the at-will relationship at risk if there is an implied guarantee of continued employment after the preliminary period is over.
Given the length of the preliminary period you are proposing, as well as the legal risks and expense of misclassification, it may be preferable to simply hire the person as an at-will employee (if you operate in an at-will state) and terminate down the line if necessary, as you would for any other position.
I hope this information is useful, and we thank you for your inquiry. As always, we recommend that you consult with experienced local counsel about the details of your specific situation.