If your Maryland workers are labeled 1099, that label alone does not decide whether you need workers compensation. Maryland looks at the real relationship: for coverage, it uses a common-law right-of-control test, so a worker you direct like an employee is an employee no matter what the paperwork says, and you may owe coverage. In construction and landscaping the rule is tougher still, with a legal presumption that a worker is an employee unless you can prove otherwise. So the honest answer is that some of your 1099 workers may count.
Who this is for: Maryland business owners who pay workers as 1099 contractors, especially in construction, landscaping, and the trades, and want to know who actually counts.
The short version
- A 1099 does not settle it. Maryland uses a right-of-control test for workers comp coverage.
- A worker you control like an employee can be a covered employee, and you may owe coverage.
- Construction and landscaping face a tougher rule that presumes a worker is an employee unless you prove three things.
- If a subcontractor is uninsured, its injured worker can become your responsibility as the hiring contractor.
- Misclassifying workers can bring back premium, state penalties, and license trouble.
The test Maryland uses for coverage
For deciding who is a covered employee, Maryland does not use a simple ABC test. It uses the common-law right-of-control test, which weighs who controls how the work is done, who can hire and fire, who supplies the tools and equipment, how the worker is paid, and whether the worker really runs an independent business. A worker who fails that test is your employee for comp purposes even if you send a 1099. The factors below are what an adjuster or the Commission will look at.
| Factor | Points to employee | Points to contractor |
|---|---|---|
| Control over how the work is done | You direct the details | They decide their own methods |
| Tools and equipment | You supply them | They bring their own |
| Hiring and firing | You can hire and fire them | They control their own crew |
| How they are paid | Hourly or salary from you | By the job, invoicing you |
| Independent business | They work mainly for you | They serve many clients under their own name |
Construction and landscaping face a tougher rule
If you are in construction or landscaping, Maryland's Workplace Fraud Act adds a stricter presumption. A worker is presumed to be your employee unless you can prove all three of these: the worker is free from your direction and control, the service is outside your usual business or done away from all of your worksites, and the worker is customarily in an independent business of the same kind. This is aimed squarely at misclassification, and it is why the trades draw the most enforcement. The one carve-out is a genuine sole proprietor with no employees other than a parent, spouse, or child. Even where this Act technically governs wage and misclassification questions rather than the comp coverage test, the two usually reach the same result on a construction site.
Uninsured subs become your problem
There is a second reason 1099 status does not get you off the hook. In Maryland a principal contractor who hires out part of its own trade to a subcontractor can be made to pay workers compensation to that subcontractor's injured worker if the sub is uninsured, just as if the worker were the contractor's own employee. The contractor can then try to recover from the sub, but the injured worker gets paid either way. That is why careful contractors collect a certificate of coverage from every subcontractor before work starts, and treat a missing certificate as a red flag. Misclassifying workers to dodge premium can also lead to back premium at audit, civil penalties running into the thousands per worker, and problems with your license.
A Hagerstown example
Illustrative, not a quote. A Hagerstown roofing company pays its crew as 1099 contractors, hands them the schedule each morning, supplies the equipment, and directs the work. Under Maryland's right-of-control test, and the tougher construction presumption, those workers look like employees, so the company really needs a policy covering them. When one falls and is hurt, the company cannot simply point to the 1099, and because it had no coverage it faces a claim, back premium, and penalties. Had it carried a policy and collected certificates from any true subcontractors, the injury would have been a routine comp claim. We help roofers classify their crews correctly. See our workers comp for roofers page.
Real questions Maryland owners ask
If my workers are 1099, do I still need workers comp in Maryland?
You might. A 1099 label does not settle it. Maryland uses a right-of-control test, so a worker you direct like an employee can be a covered employee, and you may owe coverage for them.
What test does Maryland use to decide who is a contractor?
For workers comp coverage, the common-law right-of-control test. It weighs control over the work, who supplies tools, hiring and firing, how pay is set, and whether the worker truly runs an independent business.
Is construction treated differently in Maryland?
Yes. In construction and landscaping, the Workplace Fraud Act presumes a worker is your employee unless you prove they are free from control, doing work outside your usual business, and in their own independent trade.
Can I be liable for an uninsured subcontractor's injury?
Yes. A Maryland principal contractor can be made to pay comp to an uninsured subcontractor's injured worker, as if they were your own employee. You can try to recover from the sub, but the worker gets paid.
How do I protect myself when I use subs?
Collect a certificate of coverage from every subcontractor before work starts, and treat a missing one as a red flag. Carrying your own policy and classifying workers correctly closes the gap.
What is the penalty for misclassifying workers?
It can be costly. Beyond back premium at audit, Maryland can impose civil penalties that run into the thousands of dollars per misclassified worker, more for knowing violations, plus possible license trouble.
A worker only works for me sometimes. Are they still an employee?
Possibly. Part-time or occasional work does not automatically make someone a contractor. What matters is control and independence, so an occasional worker you direct can still be a covered employee.
Why Maryland owners choose Morrow
- We shop the right market for you. In Maryland you buy workers' comp on the open market from any private insurer licensed in the state, and Maryland also runs a competitive state fund, Chesapeake Employers' Insurance Company, that both competes for ordinary business and must cover eligible employers no one else will take, so we can shop your rate widely and still have a guaranteed 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 Maryland guides
Every Maryland 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 Maryland (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?
- Maryland roofer workers comp
This guide is general information, not legal advice. Maryland rules and penalty amounts can change, so verify current requirements with the Maryland Workers' Compensation Commission or a licensed advisor before you rely on them. Last updated: July 2026.