Worker Classification Checker: Score 1099 vs. Employee Risk Before You Hire

The problem this kills

Someone asks, "Can we just pay this person as a 1099 contractor?" And the honest answer is: it depends — on control, on the money, on the relationship, and increasingly on which state you're in. But that's not how the decision actually gets made. It gets made by a busy hiring manager who wants the work done, doesn't know the IRS common-law factors from the ABC test, and ticks "contractor" because it's faster and there's no benefits paperwork.

Then the bill comes. Misclassification is one of the most expensive mistakes a small ops or HR team can make: back payroll taxes, unpaid overtime, penalties, interest, and in ABC-test states a worker who looks like a contractor on paper is presumed an employee unless you can prove otherwise. The factors that decide it are knowable and consistent — but right now they live in someone's head, in a PDF nobody reads, or in a lawyer's inbox that you only reach after the mistake is made.

You don't need to be a lawyer — or a developer — to put a real screening gate in front of that decision.

What you'll build

A small internal web app that turns the classification call into a guided, scored, reviewable process:

• A hiring manager opens the tool, names the worker and role, and answers a plain-language questionnaire about the working relationship — who controls the work, how the money flows, and what the relationship looks like.
• The tool scores each factor group (Behavioral Control, Financial Control, Type of Relationship for the IRS test; the A/B/C prongs for ABC-test states) and produces an overall risk rating — low, medium, or high — with the specific factors that pushed it up.
• Low-risk, clean contractor cases can be recorded straight away. Every medium or high-risk result is routed to HR, finance, or legal, who reviews the factor rationale and approves the final classification — the tool advises, a human decides.
• The approved decision is saved as a dated record for the worker's file, with the recommended next step (set up as 1099, set up as W-2, or gather more info), and can be exported as a clean decision summary.

This is advisory, not legal advice — and the plan says so, on screen, every time.

What's inside the Implementation Plan

The plan is a single markdown file you paste into an AI coding agent (like Claude Code). It builds the whole tool step by step, and every step ends with a copy-paste prompt.

The best part: the plan opens by interviewing you about your business — your current process and who runs it, the systems and spreadsheets you use, how you name roles and workers, the states you hire in, your typical and peak hiring volume, your real approval rules, and your messy edge cases (the long-term "contractor," the staffing-agency placement, the owner's relative). It reads a short tailored spec back to you, you confirm it, and only then does it build. You get a tool shaped to how you actually hire — not a generic template.

Inside you'll find: the discovery interview, the full IRS common-law and ABC-test factor logic (with the reader picking by state), the risk-scoring model, the questionnaire screens, the reviewer approval workflow, the decision-record store, email notifications, and the CSV export — plus a verification checklist so you know it works.

The governance it includes (this is the point)

This isn't a quiz. It's a controlled decision process, and the controls are built in from the start:

• Login so only your team can use it.
• Row-level security so each organization only ever sees its own workers and decisions.
• A complete audit trail — who answered, who reviewed, who approved, and when.
• A hard human-in-the-loop approval gate: the AI scores the risk and drafts a recommendation, but a person (HR, finance, or legal) reviews and approves every medium/high-risk case before it becomes the decision of record.
• Duplicate guards so the same worker + role can't be screened and recorded twice by accident.

That governance is exactly what turns a gut-feel "sure, 1099 him" into a defensible, documented decision you can stand behind in an audit.

Who it's for

HR and finance teams, ops leads, and hiring managers who decide — or sign off on — whether a role is a contractor or an employee, and who want a consistent, documented way to screen the risk before anyone gets set up the wrong way. If you've ever felt a knot in your stomach approving a 1099, this is for you.

You've got this — paste the first prompt and let the agent interview you.