And that company was likely breaking the law in the state in which they operated. If CA, MA, WA, or most others. CA and many other states are now going after

And that company was likely breaking the law in the state in which they operated. If CA, MA, WA, or most others. CA and many other states are now going after companies that hire contractors to do the work that is usually done by employees (and they use their own definition of "employee", too). They will hit you with fines and back employment taxes should you be audited. How would you be audited? A contractor files for unemployment, to which they are not entitled (because unemployment taxes are not paid for them). It happens all the time.