I am curious as to what sort of work they do?
I 1099ed myself one full year about 23 years ago.
The IRS ended that practice about the same time it got started in Vegas construction but they still allow it in Arizona.
Problem is too many of us do not pay unenjoyment, workers comp, fica, etc. IRS sent me a letter years later but went after the contractor.
Worker's Comp is a State requirement (and reasonable for the risk class), and each company (contractor or subcontractor) is required to carry professional liability insurance. As such, each vendor is responsible for their own tax compliance, and that is understood up front. Those with their own LLC (sole proprietors) file their own estimated taxes, including self-employment taxes which take care of the FICA, SSI, etc.