In South Carolina, a 1099 does not decide whether you need workers compensation; the state looks at whether the worker is really an employee under a right-to-control test. If you direct the work the way an employer does, that person counts toward the four-employee trigger no matter what tax form you file, and paying on a 1099 will not remove them.
Who this is for: South Carolina owners who use 1099 workers or subcontractors and want to know when those workers count and who pays if one is hurt.
The short version
- The tax form does not decide it. A 1099 label does not by itself keep a worker out of the count.
- A right-to-control test decides. South Carolina weighs your control over the work, not how you pay.
- Real employees count toward the four, which can pull you under the law even if you thought you had no employees.
- A few contractors are carved out by statute, such as commission-only real estate agents and owner-operator truckers.
- Uninsured subs are your exposure. A general contractor can owe comp to an uninsured sub's injured worker.
The four-factor right-to-control test
South Carolina uses the common-law right-to-control test, not the stricter ABC test some states use. Courts weigh four factors, and the state Supreme Court has said they are weighed evenly in both directions rather than tilted toward finding employment. The more control you have over the work, the more the worker looks like an employee.
| Factor | Points to employee | Points to independent contractor |
|---|---|---|
| Right to control the work | You direct how and when the work is done | The worker controls their own methods |
| Who furnishes equipment | You supply the tools and materials | The worker brings their own |
| Method of payment | Paid by the hour or on a regular wage | Paid by the job or on a contract price |
| Right to fire | You can let them go at will | Ending the deal requires a contract breach |
Workers the law specifically excludes
A couple of contractor types are excluded by statute no matter how the control test comes out. A licensed real estate salesperson paid on straight commission who has signed a valid independent-contractor agreement with a broker is not an employee for this purpose. So is an owner-operator commercial driver who owns the vehicle and provides it with their driving under a valid independent-contractor contract with a motor carrier. Outside those specific carve-outs, the control test governs, and a 1099 label alone will not save you.
The uninsured-sub problem
South Carolina goes a step further than the count. If you act as a general contractor and hire a subcontractor who does not carry workers comp, you can become the statutory employer of that sub's injured workers and owe them benefits, which is the opposite of how an elective state like Texas works. There is relief if the sub handed you a certificate that turned out to be false, and you can seek repayment from the party who should have carried the coverage, but the cleanest protection is to collect a current certificate of coverage from every sub before work starts. That way an injury on the sub's crew stays on the sub's policy.
A Myrtle Beach example
Illustrative, not a quote. A Myrtle Beach general contractor pays three framers on 1099s, sets their hours, and supplies the tools. Under the right-to-control test those framers look like employees, so they count toward the four, and adding one more worker puts the business under the law. The contractor also hires a drywall sub; because that sub carries its own coverage and hands over a certificate, an injury on the drywall crew stays on the sub's policy rather than falling back on the general contractor. See our workers comp for contractors page.
Real questions South Carolina owners ask
Do I need workers comp for 1099 contractors in South Carolina?
It depends on whether they are really employees. South Carolina uses a right-to-control test, not the tax form. A worker you control like an employee counts toward the four even on a 1099.
Does calling a worker a 1099 contractor keep me under the four?
No. The label does not decide it. If the person is your employee under the right-to-control test, they count toward the four-employee trigger no matter what form you file.
What is the right-to-control test in South Carolina?
Courts weigh four things: your right to control the work, who furnishes the equipment, how the worker is paid, and your right to fire. The state Supreme Court says the factors are weighed evenly in both directions.
Which workers are genuinely independent?
Someone who runs their own business, uses their own tools, sets their own methods, works for others, and can be let go only for breaching a contract looks independent. The more you direct the work, the more they look like an employee.
Are any contractors carved out by statute?
Yes, narrow ones. Licensed real estate agents on straight commission under a contract, and owner-operator truckers who provide their own vehicle under contract, are excluded regardless of the control test.
If a general contractor hires an uninsured sub, who pays an injury?
The general contractor can. South Carolina makes an upper-tier contractor the statutory employer of an uninsured sub's injured workers, so collecting proof of coverage from every sub matters.
How do I protect myself when I use subcontractors?
Treat genuine contractors as independent in fact, not just on paper, and collect a current certificate of coverage from every sub. That reduces both the count problem and the statutory-employer exposure.
Why South Carolina owners choose Morrow
- We shop the right market for you. In South Carolina you buy workers comp on the open market from any private insurer licensed in the state, because South Carolina has no state fund. If no carrier will take you, the NCCI-run assigned risk plan is the guaranteed fallback, and larger employers can apply to self-insure with approval from the state. We shop the licensed carriers so you are not stuck paying the fallback plan's higher rate.
- 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 South Carolina guides
Every South Carolina 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 South Carolina (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?
- South Carolina contractor workers comp
This guide is general information, not legal advice. South Carolina rules and penalty amounts can change, so verify current requirements with South Carolina Workers' Compensation Commission or a licensed advisor before you rely on them. Last updated: July 2026.