Do Independent Contractors Need Workers’ Comp?

Calling someone an independent contractor does not itself determine workers’ compensation status. New York’s Board says a worker under a company’s direct control may count as an employee for workers’ compensation even if the worker is treated differently for tax purposes. The Board also applies specific tests and exceptions, including special rules for some industries. Other states use their own tests.

If you hire as an independent business, ask the workers’ compensation agency in each work state how its test applies to the actual arrangement. Confirm whether the contractor must carry a separate policy, check current certificates and covered states, and review your own policy’s subcontractor and audit terms. A contract or certificate alone does not decide legal status. The relevant issue is the real working relationship, including direction, independence, and industry-specific factors, rather than the label on an invoice. Preserve the facts used to classify the engagement.