I recently started a small, field-based trades/service franchise business in New Jersey that sells and installs commercial equipment. I’m interviewing for my first (full-time) hires and trying to get worker classification right from the beginning. My understanding is that NJ has some of the strictest independent-contractor classification rules in the country. While I thought there might be some gray area with these roles, employment attorneys have advised me against using 1099 status. Their concern is that the Department of Labor could consider these workers employees, leaving me responsible for back taxes, penalties, etc. in the event of an audit (by chance, or by worker trying to claim unemployment, etc.) 1099 would be somewhat preferable to me because of the lower administrative burden, but I had assumed going in that most candidates would prefer W-2 employment. What’s surprised me is that several candidates strongly prefer 1099 and say that’s how they’ve typically worked. I also see contractors used regularly throughout the trades, including by competitors doing the same work. I understand that a worker’s preference—or what competitors do—doesn’t determine whether the classification is legal. But I’m struggling to reconcile the legal advice with what seems common in practice. With regards to NJ's ABC test for worker classification, my workers would be free from direct control, be conducting business primarily at customer locations, and technically have their own business (but not likely to have much external revenue besides with me). For NJ business owners: am I being naive about how businesses actually operate by following the lawyers’ advice (in my conversations they seemed out of touch with the realities of small business in general), or are a lot of small businesses playing with fire by misclassifying their workers? I’ve already sought legal advice; I’m hoping to hear firsthand experiences, especially from anyone who has dealt with an NJ Department of Labor classification review.