This mistake may seem obvious, but companies do it all the time. When an independent contractor is performing the same work as employees, the contractor is likely to be deemed an employee.
Remember, the determination of whether someone is an independent contractor or an employee is made based on the facts of the relationship, not what the parties call it. If the facts are that a contractor is doing the same work, in the same location, with the same instructions, and under the same supervision as an employee, then the contractor is likely an employee and should be paid as an employee.
I am not suggesting there is any problem using staffing agency workers or temp-to-hire. Those workers are being paid by the staffing agency as employees. That is, their paychecks show withholdings and deductions, and their pay is reported by the staffing agency on a W-2, not a 1099. These are employees of the staffing agency (and very possibly your joint employees, but that’s a separate issue).
The issue addressed in this post is the use of 1099 independent contractors to perform the same type of work as employees. If the work performed by an employee is employment, then it is very hard to maintain the position that the same work being performed by a contractor is not employment.
Summary: Avoid assigning contractors to perform the same work as employees. When individual contractors and employees work side-by-side doing the same thing, the likelihood of misclassification is high.