I am frequently questioned about whether a person hired can be paid by as a sub-contractor or as an employee. My answer is usually the same advice I was given when I was the individual being hired as the sub-contractor: the employer bears the majority of the burden and liability.
Should a sub-contractor become injured or angry during his employment, there are many benefits that he or she is not privy to as a sub-contractor like worker’s compensation and federal withholding. There are many fines and penalties the employer is subject to if certain policies are not upholded that clarify the relationship as a sub-contractor.
ADP has done a good job of laying out the details on this topic in this link: 1099 vs. W-2 Other