It's really about being a "Common law employee" (Score 2)

At the core of all this are ten questions that the IRS has. According to them if you can answer yes to any of them, then you are not a "consultant" and are really a common law employee.

What does this mean? It means that they disallow expenses, deductions, etc. and make you and the firm you contracted for pay more taxes. This is what happened to the "temps" and they did what others have done: sue the company that created the situation. This isn't the first time it's happened, and almost always the company loses to the "temps" because a Federal ruling carries significant weight. It was written up in "Contract Professional" a year or two ago.

Some of the ten questions are:
Are you required to attend staff meetings?
Are you provided an office, a phone?
Are you required to keep regular office hours?
etc.

Most of the time the "temps" are going "direct" (i.e. they are independant contractors without the middle man taking a cut). If they were working for another company (W-2, not 1099) who was selling their services, then it'd be impossible to claim they were employees of the buyer. Why does the IRS target the self employed? Turns out that 99% of all W-2 employees pay their taxes, since they don't have much other choice due to it automatically being taken out of their pay. Where as it's something like 95% of the self employed that pay.

So, if you got hurt because of a clueless company's policies get you declared an "employee" then shouldn't you get the benefits of being that employee?