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If her earnings were reported to her in Box 7of a 1099-MISC, instead of on a W-2. then the income is considered "self-employment" income, and is reported as business income on Schedule C of her tax return. In that situation, she is considered the "owner" of her own business.
An employee's earnings are reported on a W-2.
In addition to income reported in box 7 of a 1099-Misc, the IRS considers undocumented cash income (no W-2 or 1099-MISC), for work performed, to be self employment income.
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