If your New Hampshire workers are paid on a 1099 as independent contractors, whether you need workers compensation for them depends on whether they are truly independent, not on the form. New Hampshire presumes a worker is an employee and uses a strict multi-factor control test, not the simpler ABC test used in some states, and you must satisfy every part of it to treat someone as a contractor. If a worker who should have been an employee gets hurt while you carried no coverage, you are exposed to penalties and a lawsuit, so the label alone settles nothing.
Who this is for: New Hampshire business owners, especially in construction and the trades, who pay some or all of their workers as 1099 independent contractors.
The short version
- A 1099 form does not decide the question; New Hampshire presumes a worker is an employee until proven otherwise.
- New Hampshire uses a strict multi-part control test under RSA 281-A, and you must meet every criterion, not just some.
- If a worker is really an employee, you must carry coverage for them from day one.
- A written contractor agreement that affirms each criterion is strong evidence, but it does not override the facts.
- A general contractor can be on the hook for an uninsured subcontractor's injured workers under RSA 281-A:18.
How New Hampshire decides who is really independent
New Hampshire does not settle this on a single control question or a loose checklist. Under RSA 281-A, a worker is presumed to be your employee unless you can show the person meets all of a set of statutory criteria. In plain terms, the worker must run like a real independent business, not just carry a 1099. Miss any one criterion and the worker is an employee you must cover.
| Criterion the worker must meet | What it means in plain terms |
|---|---|
| Has an employer tax ID or takes on employer duties | The worker operates as a real business, not just a paid helper |
| Controls how the work is done | You care about the result, not the method or the step-by-step |
| Controls when the work is done | You do not set their daily hours, apart from a completion deadline |
| Hires, pays, and supervises any assistants | Their own helpers are their responsibility, not yours |
| Holds out as an independent business | They have ongoing business costs and take other clients |
| Is responsible for finishing the job | They can be held liable if the work is not completed properly |
| Is not required to work only for you | They are free to work for other businesses too |
The written agreement helps, but facts win
New Hampshire lets a written agreement do some of the work. A contract signed around the start of the job that describes the services and affirms each of the criteria is treated as strong first-look evidence that the person is a genuine contractor. But it is not a shield if the day-to-day facts say otherwise. If you supply the tools, set the schedule, and direct exactly how the work is done, a signed agreement will not turn an employee into a contractor. Use the agreement, but make sure the real working relationship matches it.
The construction trap
Construction has an extra rule that catches uninsured hirers. Under RSA 281-A:18, a contractor who subcontracts part of a job is responsible for the workers comp of an uninsured subcontractor's employees, and can then try to recover what it paid from that sub. So if you hire a sub who does not carry coverage and one of their workers is hurt, that injury can become your claim. Confirming that every sub carries its own comp, and collecting a certificate before work starts, is not paperwork, it is what keeps their injuries from becoming your uninsured loss.
A Manchester example
Illustrative, not a quote. A Manchester general contractor uses several 1099 crews and assumes the forms settle the question. On one job he supplies the tools, sets the daily schedule, and directs exactly how the framing is done, so the crew fails the control test, and one sub carries no coverage. When a framer falls and is hurt, the framer is treated as the GC's employee, and because the GC carried no coverage for that crew he faces penalties and a civil claim with the usual defenses removed. Going forward he confirms every sub is insured, collects certificates, and asks us to set up a policy so his own exposure is covered. See our workers comp for general contractors page.
Real questions New Hampshire owners ask
Do I need workers comp for my 1099 contractors in New Hampshire?
It depends on whether they are truly independent. New Hampshire presumes a worker is an employee unless they meet every part of a strict control test. If they are really employees, you must carry coverage for them.
How does New Hampshire decide if my 1099 worker is really an employee?
It uses a strict multi-part control test under RSA 281-A, not the simpler ABC test. The worker must run like a real independent business and meet every criterion, or they are treated as your employee.
Does a signed 1099 or contract make someone a contractor?
Not on its own. A written agreement affirming each criterion is strong first-look evidence, but the facts control. If you direct the work like an employer, the person is an employee no matter what the paperwork says.
My worker sets their own hours and uses their own tools. Doesn't that make them a contractor?
Not by itself. New Hampshire does not decide this on one factor. The worker must meet the whole control test, including running their own business and being free to work for others, or they are still your employee.
Is there a simple checklist I can use to call my worker a contractor?
No. New Hampshire uses a strict multi-factor control test under RSA 281-A, with a strong presumption of employment, rather than the three-part ABC test some states use. You must satisfy every criterion.
Can I be liable for my subcontractor's injured workers?
Yes. Under RSA 281-A:18, if you hire a subcontractor who does not carry comp, you can be responsible for that sub's injured employees. Collecting proof of coverage from every sub protects you.
How do I protect my business when I use 1099 crews?
Confirm each worker truly passes the control test, require subs to carry their own comp and show a certificate, and keep your own policy in place so a misclassified worker's injury does not fall on you uninsured.
Why New Hampshire owners choose Morrow
- We shop the right market for you. In New Hampshire you buy workers' comp on the open market from any private carrier licensed in the state, because there is no state fund, and if no carrier will take you the NCCI-run assigned risk plan is the guaranteed fallback, so we can shop your rate freely and still have a backstop 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 New Hampshire guides
Every New Hampshire 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 New Hampshire (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?
- New Hampshire general contractor workers comp
This guide is general information, not legal advice. New Hampshire rules and penalty amounts can change, so verify current requirements with New Hampshire Department of Labor, Workers' Compensation Division or a licensed advisor before you rely on them. Last updated: July 2026.