<prompt> Human: Hey all this is on my mobile so I apologise for any typos in advanced. But lets get started. So Im a recent engineering graduate, and starting my first job in this field soon. I got an offer from company A who is a small engineering firm. Maybe 25 employees total. They have been around And operating for about 10 years. I met with them and was given a proposal to start work for 50k a year but I will be hired on as an independent contractor. So I will have to file 1099 tax forms instead of w2. He said that most of all of their employees perfer it this way and so they just do whats best for them. I am garenteed 40 hours as I will be paid in salary instead of hourly. Im curious is this normal? Are there any advantanges to 1099 over w2? Should I feel sketched out? Are there any specific questions you guys can think of I should ask then directly? Any help or advice on this issues would be great guys. If it helps Im living in louisiana.EDITThanks for all the input guys I talked with them today and after 3 months I have the option to go W-2 with a pay raise. Alot of the other guys file 1099 but they all have the option as well they just choose 1099 for what reason I have no idea they must have their own way set up. But thanks for all the input Assistant: There are no 1099 employees. Youd be a contractor, as you note in the body of your post. But probably you should be an employee if this is like most engineering situations; you just wouldnt be 1099 at that point.This sounds like pretty underwhelming compensation for an engineering grad in the US.I doubt the part about people liking it better is really the case, especially if there is no overtime. This is for their benefit.They are probably in violation of labor law with this whole arrangement, as you would likely pass the test for being an employee. Human: As for the pay it is underwhelming. But Im an undergrad with hardly any experience and in Louisiana thats pretty typical pay. engineers beware but its an entry level position. And the company said I would be working solely for them. But I understand I wouldnt necessarily be on the books as an employee. Do you think this is normal or sketchy ? He did say there would be compensation increases at certain periods marked in the contract at certain percentages  <response>: Contractors pay higher taxes and get fewer benefits than do employees, who cost companies more than contractors do. So its to a companys advantage to claim people are contractors.The IRS has a test for whether they can do that. If you show up at their place of business, do what they tell you to do using their equipment under their supervision per their schedule, on an ongoing open-ended basis for work that is key to their organization, youre really an employee in the eyes of the IRS. Thats an oversimplification, but thats the general idea. 