Can a business partner also be considered an employee?
No. The term "partner" is being used very explicity to define a partner as a part owner of a business entity classified as a partnership, S-Corp, or Limited Liability Corporation by the IRS. Business partners are considered to be self-employed with respect to partnership income and receive a Form K-1 at the end of the tax year. Partners report income and adjustments on their individual tax return and are subject to self-employment tax.