In Massachusetts you can't hire someone as a contractor that is in effect an employee. It's really tricky to get right. But they're extremely strict about it so employers can't evade payroll taxes, workers' comp., etc.
In Arizona a person is not a contractor unless they can set their own times and their own pace to complete work that is assigned.
That means as a contractor you can't be forced to come into the office at 9:00 AM to work till 5:00 PM, if you are not allowed to set your own work schedule you are not considered a contractor and the company should be paying your taxes and you should be getting a W2 instead of a 1099.
They were fairly strict in that regard as well, my boss was paying me as a 1099 and I wasn't aware of this, and the business got audited by the IRS and he had to retroactively pay taxes and they talked to me and I had to redo my taxes for the two years I worked there. Was a nightmare.
This is federal tax law, and it applies in all 50 states. Contractors also must provide their own equipment (i.e. computer) and be able to make a profit or loss on the engagement. Absent these conditions, you are an employee as far as the IRS is concerned, and your employer is responsible for a great many taxes and sometimes overtime pay.
