Many small businesses are audited by the IRS each year to determine if their workers are truly independent contractors or really employees.  If they are found to be statutory employees, large fines and delinquent payroll taxes can result.  If your workers are independent contractors you do not have to deal with payroll taxes; however, if they work for you all or most of the time they are probably employees by IRS rules.  Other criteria are whether they use their own tools or yours and how much you control what hours they work.  In other words, the less you control the worker and only require that he gets the job done by a deadline, the more likely that worker is an independent contractor.  The IRS now has a Voluntary Classification Settlement Program that lets employers such as you escape the past due payroll taxes you never charged.  To qualify you (1) must have treated your workers consistently as nonemployees, (2) filed all Forms 1099 in the past 3 years, and (3) not currently be under audit.