1099 contractor or W-2 employee?
The IRS doesn't care what you call them. They care about how the work actually gets done.
The real test is control
If you set the hours, supply the tools, direct how the work is done, and they only work for you, they're an employee no matter what the paperwork says. Misclassification penalties (back taxes, interest, fines) routinely run into five figures when caught.
When 1099 actually fits
Genuine specialists you use a few times a month, who set their own schedule, bring their own tools, work for other shops, and invoice you. Think a CPA, a graphic designer, or a subcontractor on a one-off install.
Cost is closer than owners think
The 'cheap' 1099 isn't cheap once you account for the loyalty, training carryover, and availability you lose. For someone you need every week, W-2 almost always wins on a 12-month view.
If you're not sure, ask
A 30-minute call with a payroll provider or local employment attorney costs less than one misclassification audit. Have that call before the first paycheck, not after.
Take your version of this question further
This is one operator-tested angle on the question. Your shop, your size, your trade, and your team change the answer. Ask your specific version inside Ask a Shop Owner to get a response grounded in how owners like you actually handled it.