As to other hiring practices your comment on pay specifically raised a red flag with me if for no other reason than if you paid someone for work as an employee you'd be back dating their date of hire (as far as the government is concerned). My day job is with a company specializing in a very tiny portion of the hiring process and we see large and small companies screw it up every day. The M-247 Handbook for Employers is nearly 70 pages about how to fill out nothing more than the Federal I-9 Form. Screwing up that process can generate civil and criminal liability at the federal level. Then if you are in a state that has additional restrictions (Colorado and more coming soon) you could be incurring even more liability. Have federal contracts and get this process wrong? Potentially kiss them goodbye thanks to the FAR clause.
M-274 Handbook for Employers: http://www.uscis.gov/files/form/m-274.pdf
There are a lot of potential pitfalls employers face and it's unfortunate that the government does a pretty poor job of making it clear what the employers responsibilities are as well as consistently enforcing the rules that are on the books.
I want to be clear, I'm not trying to be argumentative or anything like that. Based solely on your initial comment I would be concerned about your hiring practice and make sure your counsel doesn't see anything wrong with it. If you are bringing in 100% of the people for a trial basis as contractors and meet the IRS rules you may have nothing to worry about. If you bring one person on under that methodology described (as a backdated employee) you could have some liability sitting in your employee records that you can't fix.
With a moment of clarity, I do recall our employees having to go through the W-9 process. In addition, not all work was "under the company umbrella." For example, if a candidate paired with an employee during a users group hack night, that was taken into consideration. Like I said, rules are made to be bent.