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Maybe, and he eludes a bit to the employee originally being 1099, but California has made 1099 all but extinct with AB-5

Allude not elude.

Thanks, learned something new.

AB-5 added exemptions allowing more employees to be contractors to the pre-existing rule articulated, based on prior statute law, by the California Supreme Court.

right but you can also just wait for California to challenge the 1099 distinction

OP wanted to be an employer and "make jobs" for the sake of printing job numbers, rustbelt mentality.

if they had more employees, elsewhere, it wouldn't have happened, if they actually did have the relevant counsel it wouldn't have happened. but they aren't able to or willing to afford either. lesson learned. likely the wrong lesson learned.

Or by having a third party, a temporary agency, actually employee the resident of another state.

Manpower is large and well known example of such an agency here in the USA.

Get legal and tax advice to see if this will work in your situation.

25% of more of your payroll is what the article said, so I wouldn’t assume so, but IANAL

1099 isn't payroll. It's paying a sub-contractor which is completely different.