You are correct, and I did not state that a contractor needs to perform work for several clients at the same time.
Conversely however, a contractor that has for some significant time, since leaving their previous employment only had one client (which is the parent scenario) is unlikely to be viewed by US labor law as not an employee.
There are other conditions besides this one: for example the contractor gets to set their own schedule and does not take detailed instructions on their tasks from the client. Again, hard to square this with the idea that you can just wave a wand and make what would have been an employee a contractor.
Conversely however, a contractor that has for some significant time, since leaving their previous employment only had one client (which is the parent scenario) is unlikely to be viewed by US labor law as not an employee.
There are other conditions besides this one: for example the contractor gets to set their own schedule and does not take detailed instructions on their tasks from the client. Again, hard to square this with the idea that you can just wave a wand and make what would have been an employee a contractor.