What is a 1099 contractor?
A “1099 contractor” (also called an independent contractor, 1099 worker, or freelancer) is someone you pay for specific work, but who isn't your employee. They run their own business — you're just hiring them for a job.
“Day labor” — cash workers you hire by the day, even informally — counts here too. So does any sub-contractor you bring in, even if they have their own paperwork.
Signs you have a 1099 contractor
- They set their own hours.
- They bring their own tools and equipment.
- They can work for other clients too.
- You don't withhold taxes — you pay the full amount.
- At year-end, you send them a 1099-NEC.
Real-world examples
- • The freelance designer who built your logo.
- • A subcontractor you brought in for one job.
- • A bookkeeper who handles invoices once a month.
- • Day labor you paid in cash to help unload a truck.
Why this matters for your Workers' Comp
Ghost policies don't cover1099 contractors, subs, or day labor. If a 1099 you hired gets hurt on your job, the policy won't pay out — and the carrier can cancel coverage retroactively.
If you hire 1099 workers, you need a different kind of policy. In many states, hiring even one triggers a legal requirement for Workers' Comp on its own. Tell us before it becomes a problem.