I am afraid you are wrong calling them contract employees by simply paying them by the car and giving them a 1099.
The IRS has very strict rules about what constitutes a contract employee and what most detail business owners do "does not constitute contract labor."
I could offer an lengthly dialogue on the laws, but I wil you what, if you send me your email address I will send you this article that clearly outlines what you have to do to consider an employee a contract laborer.
Ifyou are convinced you are correct then call the IRS office in your area and ask them.
Looking forward to hearing from you.
Bud Abraham
buda@detailplus.com