Do Contractors and Independent Contractors Need Workers’ Comp?
A business may have to cover a contractor who qualifies as an employee under state law, regardless of the contract or 1099 label.
New York warns that workers under a business’s direct control may count as employees and that many subcontractors are covered; other states use their own tests and exceptions. If you misclassify a worker, your business may owe benefits or face a payroll adjustment.
Check each work state’s classification test and require contractors to show current coverage where applicable. Verify policy dates, covered states, and legal entity names; ask your insurer how uninsured subcontractor labor is handled in audits.
