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MenuLet me first preface that: I am not a Lawyer or an Accountant nor am I offering direct legal advice based on your situation. I can only interpret from the details you have provided based on similar scenario's I have experienced. Please seek legal counsel or professional accounting help before taking action on any advice below.
In the scenario you listed above, it's best to separate out earnings generated by affiliates vs. the revenue they might receive from work as it has a two-fold benefit: 1)The contractor receiving commissions can properly denote what is referral monies and what is money from SOW's (and if needed, can separate those out when submitting his business taxes). 2) if they are US affiliates (from the marketplace/oDesk side) -- you should be collecting W9's from all people you pay commissions (i.e. affiliates) so that you can report that to the IRS at the end of the year.
If you lump the two together - you won't be accurately reporting what money went to whom.
If you are doing that already from the act of being the billing authority (and processing payments and requesting W9's) than what I mentioned above is null.
Hope this helps! Good luck.
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