Subcontractors and 1099 helpers on your policy

An uninsured sub lands on your policy

The moment a subcontractor without coverage does work for you, their payroll becomes your premium. NYSIF states it as a rule of the arrangement: subcontractors must be covered, and if yours is not, the sub will be included in your policy, with you responsible for the premium and the claims filed for that sub.

The Board describes the same mechanism from the claims side. Individuals alleged to be subcontractors have been determined, in the Board's adjudicatory capacity, to be employees when injured, with claims against the business that hired them.

So the 1099 label protects nobody. What protects you is the sub's own New York policy, proven before the work starts and again each year.

The state fund even sells a tool for it: policyholders can monitor subcontractor coverage through their online account, entering a sub's FEIN to see current coverage and get notified when it changes.

NYSIF states subcontractors must be covered, and that an uncovered sub will be included in the policyholder's policy, who pays the premium and the claims. — New York State Insurance Fund, retrieved 2026-09-29

The Board states that individuals alleged to be subcontractors have been determined by the Board, in its adjudicatory capacity, to be employees when injured. — New York State Workers' Compensation Board, retrieved 2026-09-29

The certificates to collect before work starts

Collect before the first day of work, and again annually. NYSIF's instruction to policyholders is to obtain a certificate of workers' compensation insurance from each subcontractor before work is started and annually thereafter.

The New York form is C-105.2, requested by the sub from its own carrier, or form U-26.3 for NYSIF policyholders. An ACORD certificate is not acceptable proof under Section 57 of the law.

Then verify, because a certificate shows active coverage as of its date. NYSIF policyholders can use NYSIF Certificate Validation, and other subs can be checked through the Board's Employer Coverage Search.

Out-of-state subs need a certificate that specifically lists New York in Item 3A on the employer's policy information page. Coverage that excludes New York is not coverage here.

NYSIF instructs policyholders to get a certificate from each subcontractor before work starts and annually, and to verify it through NYSIF or Board tools. — New York State Insurance Fund, retrieved 2026-09-29

ACORD forms are not acceptable proof of New York State workers' compensation coverage under WCL section 57. — New York State Workers' Compensation Board, retrieved 2026-09-29

The audit that prices every missing certificate

NYSIF's premium audit asks for all subcontractor certificates from the policy period. Keep the coverage documents in one file as you collect them, because that is the file the auditor asks for.

If the documents are missing, the consequence is mechanical: the policy premium is recalculated to include the uninsured subs in your payroll, following the rating board's guidelines for subcontractor charges.

The Board's advice to employers runs the same direction: collect certificates of New York State workers' compensation insurance from all subcontractors providing services, because carriers routinely charge general contractors premiums for subs not covered by their own New York policies.

The recalculation is not a fine, so there is no appeal on fairness grounds. It is the premium for payroll you did not think you had, and the claims exposure that came with it.

At premium audit, NYSIF recalculates the policy to include in payroll any subcontractor whose coverage documents are not produced, following NYCIRB guidelines. — New York State Insurance Fund, retrieved 2026-09-29

The Board advises employers to collect certificates from all subcontractors, because carriers routinely charge general contractors premiums for subs without their own New York policies. — New York State Workers' Compensation Board, retrieved 2026-09-29

The presumption trades, construction and transportation

Two trades carry a statutory presumption that turns contractor labels into employment. Under the Construction Industry Fair Play Act, any worker injured while performing services for a contractor is presumed to be that contractor's employee.

An individual is an independent contractor in construction only if all three criteria are proven: free from control and direction, services outside the usual course of the employer's business, and an independently established similar trade. An entity must meet all twelve criteria.

The Commercial Goods Transportation Industry Fair Play Act runs the same structure for drivers transporting goods in a commercial motor vehicle, presumed employees of the transportation contractor who compensates them, with an eleven-criteria entity test.

If your subs are construction or goods-transportation labor, the 1099 discussion is mostly theater: the presumption plus your carrier's sub charges make the sub's own policy the only safe configuration. The electricians page covers the construction side in full.

Under the Construction Industry Fair Play Act, any worker injured performing services for a contractor is presumed to be that contractor's employee. — New York State Workers' Compensation Board, retrieved 2026-09-29

11 criteriaUnder the Commercial Goods Transportation Fair Play Act, a driver transporting goods is presumed to be the employee of the contractor who compensates them, absent the eleven-criteria test. — New York State Workers' Compensation Board, retrieved 2026-09-29

The criteria list that decides every other trade

Outside construction and transportation, independent contractor status is decided by the Board's criteria list, and an individual must meet the whole shape of it.

The list includes performing free from direction or control, obtaining their own FEIN or having filed business or self-employment tax returns from the previous calendar year, maintaining a separate business establishment, and performing work different from the hiring business while working for others.

It also includes carrying a liability insurance policy, and where appropriate workers' compensation and disability policies, under their own legal business name and FEIN, having recurring business liabilities and obligations, advertising their own business, providing all equipment and materials, and working under their own permit, contract or authority.

A sub who fails two lines of that list is an employee at claim time, whatever the invoice says. The salon trade leans on this list hardest, and the salon page shows the failure mode from both chairs.

Outside those two trades, an individual qualifies only by meeting the Board's full list, from their own FEIN and separate establishment to insurance in their own business name. — New York State Workers' Compensation Board, retrieved 2026-09-29

The two directions of proof you owe

Proof runs both ways in New York. You owe your clients proof of your own coverage, and you owe your carrier proof of your subs' coverage, and the papers differ by direction.

Upward, your carrier sends the C-105.2 to whoever asks, government or private. Downward, you collect your subs' certificates into the audit file and validate them. The proof guide covers the upward direction.

The Board also warns that a business cannot require its own employees to obtain their own workers' compensation policies or contribute towards one, while a genuine independent business with its own employees can be required to carry coverage as a subcontractor. That distinction is the whole game: employees can never be pushed down, real businesses can.

One habit holds it together: a sub file with every certificate, every FEIN, and a validation date on each, opened the day the sub is hired. NYSIF's monitor tool will even watch the coverage status for you and flag the change.

A business cannot require its own employees to buy their own policies or contribute towards one, but may require a genuine independent business with employees to be covered as a subcontractor. — New York State Workers' Compensation Board, retrieved 2026-09-29

NYSIF policyholders can monitor subcontractor coverage through their online account by FEIN, and be notified when coverage changes. — New York State Insurance Fund, retrieved 2026-09-29

Questions