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W-2 vs. 1099: What's the Difference and Are You at Risk?

Updated: Nov 17, 2023

As a healthcare professional, you've likely been presented various per-diem job opportunities in the market, but there’s something that can set these opportunities apart – the type of employment that goes along with it: W-2 or 1099. In this blog, we will educate you on the main differences, risks, and benefits associated with being a W-2 employee or a 1099 worker.


What is the difference between W-2 employees and 1099 workers?

The main difference between a W-2 employee and a 1099 worker is that a W-2 employee is hired as an employee of a company, whereas 1099 workers are considered self-employed or independent contractors.


As an employee with GrapeTree, you are considered a W-2 employee; however, you may be classified as a 1099 worker with other agencies. A 1099 classification may be more attractive up front when it comes to higher payrates, but is it the better option for you overall?

Potential Risks as a 1099 Worker

If you are a 1099 worker for another agency, it is important to note that your federal and state taxes are NOT deducted from your paychecks, and you may not be covered with workers compensation insurance or liability insurance unless you purchase it yourself.

If the employer does not provide this coverage, here are some scenarios where you could be exposed to risk and why the coverage could be important:

  • Your Taxes: Since you wouldn’t have taxes deducted from each paycheck like you would as a W-2 employee, you may end up owing thousands of dollars to the IRS all at one time during tax season.

  • Worker’s Compensation: If the agency isn’t offering worker’s compensation insurance, you won’t have any coverage if you’re injured on the job and you will be required to pay out of pocket for any physician’s appointments, treatment plans, physical therapy, etc. Even further, if you can’t work while you are injured, you also won’t receive any sort of payment during your recovery time.

  • Liability Insurance: If the agency isn’t offering liability insurance, you will not have coverage if a potential lawsuit arises from an incident you are involved in. This means you would be paying thousands or millions of dollars out of your own pocket for an attorney to represent you.

  • Overtime: Oftentimes, 1099 agencies offer you the ability to work over 40 hours a week, but without compensating you for overtime pay.

1099 jobs can seem like the preferred option, especially when it comes to wages, but keep in mind all the hidden costs you may have to face in the list above, as well as all the benefits you are missing out on with a W-2 employer.

The Benefits as a W-2 Employee

While other staffing agencies place their employees as independent contractors, exposing them to risks for lawsuits, fines, and penalties, GrapeTree ensures you are in good hands! Keep in mind, we may offer slightly lower starting wages up front versus a 1099 job, but we extend our benefits to you to ensure you are covered when it comes to:

  • Worker’s compensation

  • Liability insurance

  • Employer paid taxes

  • Top wages with weekly or daily pay

  • Flexibility to pick when and where you work

  • Referral and Loyalty Program bonuses

  • Giveaways and swag, including a chance to win a $2,500 trip voucher

… plus so much more! We are always looking out for our healthcare professionals’ best interests and are proud to offer the benefits you deserve as a W-2 employee!


Ready to join a company that has your back? Click here to apply with GrapeTree.

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