You and your crew are about to work for someone. Are you W-2 employees, 1099 contractors, or something else?
This isn't a small distinction. It affects taxes, legal protections, how you get paid, and what the employer is responsible for.
The two main paths
In the US, when someone hires you to work, you're typically classified as one of two things:
W-2 employee. The employer withholds taxes from your pay (Social Security, Medicare, federal/state income tax), pays half of your Social Security and Medicare taxes, provides workers comp insurance, may offer benefits (health insurance, paid time off, retirement), and has more control over how, when, and where you work.
1099 independent contractor. The employer pays you the full amount you've agreed on with no withholding, doesn't pay any of your payroll taxes, doesn't provide benefits or workers comp, and has limited control over how you do the work. You're responsible for your own taxes and your own benefits.
Which one applies to your crew?
Depends on the engagement. The IRS uses a multi-factor test that loosely boils down to:
You're more likely an employee if:
- The employer controls how you work (set hours, specific procedures, mandatory training)
- You work primarily or exclusively for them
- The relationship is ongoing rather than project-based
- They provide your tools, uniforms, equipment
You're more likely a contractor if:
- You control how the work gets done
- You work for multiple clients
- The work is project-based with a defined end
- You bring your own tools, set your own schedule
Most ongoing hospitality, retail, and service jobs are W-2. Most project-based work (events, catering, freelance creative) is 1099.
Why employers misclassify
Some employers will try to hire you as a 1099 contractor when you should be a W-2 employee. Why? Cheaper for them. They skip payroll taxes (~7.65% of your wages), workers comp, unemployment insurance, and benefits.
This is illegal in most cases. It's called "misclassification" and the IRS, state labor boards, and courts take it seriously.
If you suspect you're being misclassified — meaning you're treated like an employee but paid like a contractor — you have options. You can file a Form SS-8 with the IRS asking for a determination. You can file a wage claim with your state labor board.
What being a 1099 contractor means in practice
You pay self-employment tax. That's 15.3% on top of regular income tax — covering both halves of Social Security and Medicare. You file Schedule SE with your annual return.
You can deduct business expenses. Tools, mileage, phone costs, training, gear, even part of your home if you have a dedicated workspace. Track everything.
You make estimated quarterly tax payments. The IRS doesn't want to wait until April. You pay 4x per year (April, June, September, January). If you skip these, you'll owe penalties.
You have no benefits. No employer-paid health insurance, no paid time off, no 401(k) match. You're on your own.
You're responsible for your own insurance. Workers comp doesn't apply unless you buy your own. General liability insurance is on you.
Crew-specific considerations
Per-member 1099. Each crew member is paid directly by the employer as their own contractor. Each member files their own Schedule C. The crew leader is just the contact, not a payer.
Crew as LLC, billing the employer. The crew forms an LLC. The LLC bills the employer for the work. The LLC pays each member. More setup but cleaner for project work.
Sole proprietor crew. The leader operates as a sole proprietor and 1099s each crew member individually for their portion. Common for small crews and project work. Some legal protection issues — leader is personally liable.
Most ongoing employment situations on Crewed will be W-2 (employer pays each member individually). Project work is more often 1099.
What to do before you start — if you're going 1099
- Get an EIN if you're forming an LLC or sole proprietorship — free from IRS.gov
- Open a separate bank account for business income/expenses
- Track every dollar in and out
- Set aside 25-30% of every payment for taxes
- Talk to an accountant before your first quarter
- Get insurance
- Know your state's laws
What to do before you start — if you're going W-2
- Fill out W-4 accurately
- Keep your pay stubs
- Get your W-2 by January 31
- Know what benefits exist, if any
On Crewed specifically
Crewed doesn't decide your classification. The employer does. When an engagement is proposed:
- If it's "Permanent" or "Recurring rotation" with consistent hours → likely W-2
- If it's "Project" or "Short-term contract" with defined deliverables → could be 1099
- "Trial" engagements often start as 1099 with conversion to W-2 if it works out
Ask the employer directly: "Will this be W-2 or 1099?" Both are legitimate; you just need to know.
When to consult a lawyer or accountant
- Forming an LLC or other business entity
- First year as a contractor
- Engagement disputes (unpaid invoices, misclassification claims)
- Complex tax situations (multiple states, partnerships, etc.)
- Insurance and liability questions
Worth the $200-500 for a one-hour consultation.