In Washington, D.C., paying a worker on a 1099 does not settle whether you need workers compensation for them. D.C. decides who is really an employee with a court-made test that looks at the true nature of the relationship, not the label on the paperwork. If a worker you call a contractor is, in substance, part of your regular business, they can count as an employee, and a hurt worker you misclassified can leave you paying out of pocket.
Who this is for: D.C. owners who use 1099 workers, freelancers, gig workers, or subcontractors and want to know when coverage is still on the hook.
The short version
- A 1099 label does not decide coverage; D.C. looks at the real relationship.
- The District uses the relative-nature-of-the-work test, not the simpler ABC test used for some tax rules.
- A worker who does your core, regular work is likely an employee no matter what the contract says.
- If you hire an uninsured subcontractor, you can be made to pay benefits to that sub's injured worker.
- Collecting proof of coverage from every sub is the cheapest way to protect yourself.
How D.C. decides who is an employee
D.C.'s courts use what is called the relative-nature-of-the-work test to sort employees from true independent contractors for comp. It weighs two things: the nature of the worker's job, meaning how skilled and separate a business it is and whether it can carry its own risk, and how that job relates to your business, meaning whether the work is a regular part of what you do and whether the arrangement is ongoing rather than a one-off. The controlling question is usually the second one: is this person doing work your company specializes in and does regularly? If yes, they lean toward employee even with a 1099. This is broader and more worker-friendly than a pure control test, so do not lean on the fact that you did not manage their hours.
| Worker | Likely status for comp | Why |
|---|---|---|
| Framer paid 1099 on your framing crew | Likely employee | Does your core, regular work as part of the business |
| Outside CPA who files your taxes once a year | Likely contractor | Separate skilled business, one-off, not your regular work |
| Long-term 1099 who works only for you | Leans employee | Continuous arrangement doing your regular work |
| Licensed subcontractor with its own crew and policy | Contractor | Runs a separate business and carries its own coverage |
Two different tests, kept separate
D.C. adds a wrinkle worth flagging. For wage and tax questions in construction, the District uses a stricter ABC-style test under a separate misclassification law. That test does not govern workers comp coverage, which runs on the relative-nature-of-the-work test above. So a worker could be classified one way for a wage claim and another way for comp. When you are deciding whether to insure someone, use the comp test, and do not assume a tax classification answers the comp question.
The subcontractor trap
Even a genuine subcontractor can create a comp bill for you. Under D.C.'s subcontractor rule, if you hire a sub who does not carry its own coverage and one of that sub's workers is hurt, you as the hiring contractor can be made to pay the benefits. The fix is simple and cheap: get a current certificate of coverage, which is written proof of a policy, from every subcontractor before they start, and keep it on file. If a sub cannot produce one, treat their crew as your exposure and price it into your own policy.
An Anacostia example
Illustrative, not a quote. An Anacostia general contractor pays three framers on 1099s and treats them as contractors. Because the framers do the contractor's core, regular work on an ongoing basis, D.C.'s test would likely treat them as employees for comp, so the contractor should be insuring them. When one framer falls and breaks a wrist, an uninsured contractor would be paying the medical bills and lost wages directly. We review who is really a contractor versus an employee, and we collect coverage certificates from any true subs. See our workers comp for contractors page.
Real questions District of Columbia owners ask
If my workers are 1099, do I still need comp in D.C.?
Maybe. A 1099 label does not decide it. D.C. uses the relative-nature-of-the-work test to see if a worker is really an employee, and a misclassified worker who gets hurt can leave you paying out of pocket.
What test does D.C. use for workers comp?
The relative-nature-of-the-work test, made by the D.C. courts. It weighs how separate the worker's business is and whether their job is a regular part of your business. It is broader than a pure control test.
I heard some states use a strict 'ABC' rule for contractors. Does D.C. use that for workers comp?
No. D.C. uses an ABC-style test for some wage and tax questions in construction, but not for comp coverage. For workers comp, the relative-nature-of-the-work test controls, so keep the two separate.
Can a real subcontractor still cost me a claim?
Yes. If you hire a subcontractor with no coverage of its own and one of its workers is hurt, D.C. can make you pay the benefits. Collect proof of coverage from every sub before they start.
How do I protect myself when I use subs?
Get a current certificate of coverage from each subcontractor and keep it on file. If a sub cannot show one, treat their crew as your exposure and price it into your own policy.
Does managing their hours decide if they are a contractor?
Not by itself. D.C.'s test is broader than control over hours. What matters most is whether the person does your regular, core work on an ongoing basis, which leans toward employee.
Why does misclassifying a worker matter so much?
Because if a worker you called a contractor is really an employee and gets hurt, you may owe the benefits with no policy behind you, plus exposure to a fine and a direct lawsuit.
Why District of Columbia owners choose Morrow
- We shop the right market for you. In Washington, D.C. you buy workers' comp on the open, competitive private market from any insurer licensed in the District, because there is no government fund, and if no carrier will take you the NCCI-run assigned risk plan is the guaranteed backstop, so we can shop your rate freely and still have a fallback for hard-to-place work.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related District of Columbia guides
Every District of Columbia business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in District of Columbia (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Do I need workers comp for 1099 contractors?
- What is a ghost workers comp policy?
- DC contractor workers comp
This guide is general information, not legal advice. District of Columbia rules and penalty amounts can change, so verify current requirements with the D.C. Office of Workers' Compensation or a licensed advisor before you rely on them. Last updated: July 2026.