Workers' Comp for 1099 Contractors
Quick answer: Workers' comp covers employees, not true independent contractors. But getting a 1099 instead of a W-2 doesn't settle which one you are. Your state's legal test does. In California, the law presumes you're an employee unless the company proves all three parts of the "ABC test."
California's ABC test
Labor Code §2775 says a person paid for labor or services is an employee unless the hiring company shows all three of these:
- A: Free from control. You're free from the company's control and direction, both in the contract and in practice.
- B: Outside the usual business. Your work is outside the usual course of the company's business.
- C: Your own business. You're customarily engaged in an independent trade or business of the same kind.
Fail any one, and you're an employee under the test. A delivery driver working for a delivery company usually has trouble with part B, for example. The law has exceptions for certain occupations, and for some situations courts use an older multi-factor standard instead.
Texas and Florida
Texas and Florida don't use California's ABC test; each has its own definitions in its workers' comp law. In Texas, there's an extra question even if you are an employee: whether your employer carries workers' comp at all, since most private Texas employers can choose not to. If you're unsure of your status, the state workers' comp agency is the place to ask.
If you're hurt and were paid on a 1099
- Report the injury to the company in writing anyway, within your state's deadline. In California, Texas, and Florida that's 30 days. See what to do if you're hurt at work.
- Write down who controlled your schedule, tools, and how the work was done. That's the evidence a status decision turns on.
- Ask the state workers' comp agency or a lawyer whether you count as an employee. Don't assume the 1099 answered it.
Common questions
Can I buy my own workers' comp as a self-employed person?
Rules on covering yourself vary by state and by business type. Ask an insurance agent licensed in your state. For income replacement if you're truly self-employed, people often look at private disability insurance instead.
My contract says I'm an independent contractor. Isn't that the end of it?
No. Under California's test, the label in the contract doesn't control. Part A looks at control "both under the contract and in fact," so what actually happens on the job counts.
Sources
This guide is general information, not legal advice. Whether you're an employee depends on your state's law and the facts of your work.