Certainly possible but remember that "contractor" and "employee" have legal definitions. You can't "just" call an employee (by the legal definition) a contractor.
(Edit: I see ljoshua beat me to the possibility for issues here but it's important to emphasize that it can be done, just play by the rules to avoid trouble down the line.)
(Edit: I see ljoshua beat me to the possibility for issues here but it's important to emphasize that it can be done, just play by the rules to avoid trouble down the line.)