Comment by bb88

Not necessarily. If the employee is going through a body shop (and it sounds like he was, since he had a recruiter) then he might be an employee on W2 of the staffing agency, but not on the actual payroll of the company. That's different than forcing the person on a 1099 as part of an employment contract.

In the end he's still a "contractor" in the eyes of the company, and typically if something goes wrong, he's gonna be the first to go.