A W-2 is generally issued to employees, reflecting wages paid along with the taxes withheld on their behalf throughout the year. A 1099 is generally issued to independent contractors, who are typically responsible for handling their own tax withholding.
The classification between employee and contractor affects far more than which form gets issued — it shapes payroll tax obligations, benefits eligibility, and reporting requirements, so getting the classification right at the outset matters.
Reviewing how each worker is classified, and confirming the paperwork matches that classification, is a routine part of keeping payroll records accurate and current.