You and the parent are talking about two different types of "contractor". You are talking about an individual working as a proper independent contractor. You p

You and the parent are talking about two different types of "contractor". You are talking about an individual working as a proper independent contractor. You pick your clients, negotiate rates and other details, provide your own insurance, pay your own employment taxes, your clients send you 1099s every year. ghshephard is talking about workers who are typically W-2 employees of a contracting agency. The agency contracts with the "employer" to provide the workers. The "employer" pays the agency who in turn pays the workers, pays various employment taxes, sometimes provide health insurance and other basic benefits. There is a third type, which selectodude in a sibling comment to this one posted about. Those are individuals working directly for a company which is abusing the term/status "independent contractor". This is not terribly rare, but it is illegal, and can get the employer in trouble with the IRS and state DOL if reported, especially if the workers haven't been paying the taxes themselves.