Its legal. They way you defined contractors and employees is not a real good one. What you have stated are more or less just characteristics of the 2. Control is the factor.
Tradesmen have always supplied their own tools. Look at electricians, plumbers, and laborers in the construction industry. They all supply a good percentage of the tools they use. Mostly hand tools and safety eq. Im an employee, but I supply my own tools and vehicle. Because the employer has all the control on how when and where I use those tools, Im an employee. Although I dont buy supplies like cable, jacks, or anything that is actually to be installed in the plant.
Companies are allowed to give employees allowances. This is why its legal. Although some companies use this just as a way to save money. It saves them money on the OT rate, and the large hourly wage for the first 40hrs keeps them looking attractive to applicants. Especially those applicants who really dont want anything more than 40hrs.
Re: W-2 and 1099 Legal??
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