1099 contract work: Risks every nutrition consultant should know

If you are considering working with a staffing company, it is important to understand the difference between independent 1099 contract work and W-2 employment. This distinction may seem trivial, but it is important to protect yourself and your livelihood.

What is 1099 contract work?

The term “independent contractor” refers to someone who works for themselves and isn’t financially dependent on a single employer. These workers are commonly referred to by different names, including independent contractor, self-employed, and freelancer.

As of March 11, 2024, the U.S. Department of Labor modified regulations for determining if a worker is an employee or independent 1099 contract worker. Employers are responsible for determining whether a worker is a W-2 employee or a 1099 contract worker under the Fair Labor Standards Act (FLSA). Misclassification happens when an employer wrongly labels an employee as a 1099 independent contractor.

The risks of 1099 contract work for registered dietitians

Organizations hiring 1099 independent contractors illegally can also be held responsible for paying back-taxes and interest on employees’ wages, as well as FICA taxes that weren’t withheld originally. Failing to make these payments can result in additional penalties and interest, which can quickly compound. Additionally, if the IRS believes a facility has intentionally misclassified workers, the facility may face criminal and civil penalties.

The risks with misclassification are plentiful. Misclassification claims sometimes recover double damages and liability for the workers’ attorney’s fees, and these claims for retroactive recoveries are often made as class actions. Large court awards for misclassification by staffing firms are frequently reported in staffing publications.

Independent contractor misclassification risks can be avoided by requiring workers to accept W-2 status. Workers who could qualify as independent contractors can still be assigned as staffing firm employees while they maintain their independent contractor businesses on the side.

Misclassification of registered dietitians

Misclassification occurs when an employer treats a worker who is an employee under the FLSA as an independent contractor. Misclassifying employees as independent contractors is a serious problem because misclassified employees may not receive the minimum wage and overtime pay to which they are entitled under the FLSA or other benefits and protections to which they are entitled under the law.

Hiring or working as a 1099 contract worker when W-2 employment is more appropriate is not without its risks. In fact, there are risks to both the contractor and employer. Independent contractors can risk tax audits and penalties to themselves personally, and they aren’t eligible for benefits such as paid sick leave.

On the other hand, W-2 employees (including Dietitians On Demand consultant dietitians) are eligible for employer-funded paid sick leave, plus benefits like professional liability and worker’s compensation coverage. 

Why is a registered dietitian a W-2 employee, not a 1099 independent contractor?

In the world of clinical nutrition, registered dietitians working in a medical facility are not 1099 independent contractors. They are W-2 employees, and according to the IRS, here’s why:

• They are expected to communicate with the facility as to when they will be on the premises and usually work set hours.
• They perform services that can be controlled by an employer and are required to be carried out in a certain order, such as patient nutrition assessments.
• They are required to submit reports, in the form of charting.
• They work onsite at the medical facility.
• They are paid an hourly, weekly or monthly rate rather than on a project basis.

To be classified as a true 1099 independent contractor, a worker must have complete autonomy. A few items the IRS uses to define autonomy include:

• The worker is not required to set a schedule.
• The worker performs tasks in any order they wish.
• The worker is not required to leave written or oral reports.
• Work is not performed on the company premises.
• A 1099 worker is paid on a project basis and at the project’s completion, not on an hourly or weekly basis.

How to decide if 1099 or W-2 classification is best

The US Department of Labor developed a list of indicators to determine if a worker is a W-2 employee or a 1099 independent contractor.

Indicators of a 1099 independent contractor:

• In business for themself
• Can increase profit through business decisions
• Typically provides their own materials, tools and equipment, and uses them to extend market reach
• Often works with multiple clients
• Temporary relationships until project completed
• Decides how and when they will perform the work
• Decides what work or projects they will take on

Indicators of a W-2 employee:

• Working for someone else’s business
• Generally, can only earn more by working additional hours
• Typically uses the employer’s materials, tools and equipment
• Continuing or indefinite relationship with the employer
• Employer decides how and when work will be completed
• Employer assigns the work to be performed

At Dietitians On Demand, we work hard to do what’s best for our dietitians and our clients. This includes the correct classification of our consultant dietitians.

Dietitians On Demand is a nationwide staffing and recruiting company for registered dietitians, specializing in short-term, temporary and permanent-hire positions in acute care, long term care and food service positions. We’re dedicated to dietitians and helping them enhance their practice and excel in the workplace. Check out our job openings, request your coverage, or visit our store today!

References

Staffing Industry Analysts. (2025, June 3). Staffing firms face rising independent contractor misclassification risks with IC workers. Retrieved June 12, 2025, from https://www.staffingindustry.com/editorial/staffing-industry-review/staffing-firms-face-rising-misclassification-risks-with-ic-workers 

U.S. Department of Labor, Wage and Hour Division. (n.d.). Misclassification of employees as independent contractors under the Fair Labor Standards Act. Retrieved June 17, 2025, from https://www.dol.gov/agencies/whd/flsa/misclassification

U.S. Department of Labor, Wage and Hour Division. (2024, January 10). Employee or independent contractor classification under the Fair Labor Standards Act (Final Rule, 89 FR 1638). Federal Register. Retrieved June 18, 2025, from https://www.federalregister.gov/documents/2024/01/10/2024-00067/employee-or-independent-contractor-classification-under-the-fair-labor-standards-act