1099 or employee that is always the question the small business owners faces when hiring. You can 1099 people you hire. If you aren't doing salaries then you may want to treat them like1099 independent contractors and compensate that way but keep in mind that there are specific tests involved for this that the IRS will hold you to in an audit and THEY CAN BACK TAX YOU. You must determine if they can be an independent Contractor or an Employee.