If your Virginia 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. Virginia decides this with a common-law right-of-control test, not the simpler ABC test used in some states, and the Commission looks behind any written agreement to see who really controls the work. On top of that, Virginia counts a subcontractor's employees toward your own more-than-two threshold, even when the sub has coverage, and a general contractor can be on the hook for an uninsured sub's injured workers. The label alone settles nothing.
Who this is for: Virginia 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; Virginia looks at who actually controls the work.
- Virginia uses a right-of-control test, weighing four factors, not the three-part ABC test.
- A worker you direct like an employee is an employee you must count and cover.
- A subcontractor's employees count toward your more-than-two threshold, even when the sub has its own coverage.
- If you hire subcontractors, Virginia can treat you as the legal employer of their workers (a 'statutory employer'), so an uninsured sub's injured worker can become your responsibility.
How Virginia decides who is really independent
Virginia does not use a simple checklist or a single form. It asks who has the right to control not just the result of the work but the means and methods used to get there. If the worker is free to choose how the job gets done, they lean toward independent; if you direct the how, they lean toward employee. The Commission weighs four factors, with control the most important.
| Factor | What it means in plain terms |
|---|---|
| Who selects and engages the worker | Whether you hand-pick and bring on the person |
| Who pays the wages | Whether you set and pay their compensation directly |
| Who can fire the worker | Whether you hold the power to dismiss them |
| Who controls how the work is done | The biggest factor: whether you direct the means and methods, not just the result |
The written agreement helps, but facts win
A written independent-contractor agreement does not bind the Commission. Virginia has said the parties cannot simply designate a legal status, and the Commission will look behind the agreement to the real working relationship. So if you supply the tools, set the schedule, and direct exactly how the work is done, a signed contract will not turn an employee into a contractor. Use a clear agreement, but make sure the day-to-day facts match it, because it is the facts, not the paperwork, that decide who you must cover.
The construction trap
Construction has two extra rules that catch uninsured hirers. First, Virginia counts a subcontractor's employees toward your own more-than-two threshold, even when the sub carries its own coverage, so hiring subs can make you a business that must carry a policy. Second, a general contractor or owner who subcontracts work that is part of its trade or business is the statutory employer of the sub's workers, which means an uninsured sub's injured worker can look up the chain to you for benefits. You can then try to recover what you paid from the sub, but the exposure lands on you first. That is why Virginia general contractors count their subs, demand a certificate from every one before work starts, and keep their own policy in place.
A Norfolk example
Illustrative, not a quote. A Norfolk 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 right-of-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 claim with his usual defenses removed, plus statutory-employer liability for the uninsured sub's worker. Going forward he counts every sub toward his own number, confirms each is insured, collects certificates, and asks us to set up a policy so his exposure is covered. See our workers comp for general contractors page.
Real questions Virginia owners ask
Do I need workers comp for my 1099 contractors in Virginia?
It depends on whether they are truly independent. Virginia looks at who controls the work, not the form. If you direct the how, the worker is an employee you must count and cover, whatever the 1099 says.
How does Virginia decide if my 1099 worker is really an employee?
It uses a common-law right-of-control test, not the ABC test. The Commission weighs who selects, pays, and can fire the worker, and above all who controls how the work is done, with control the most important factor.
Does a signed 1099 or contract make someone a contractor?
Not on its own. Virginia says the parties cannot just designate a legal status, and the Commission looks behind the agreement. If you direct the work like an employer, the person is an employee no matter what the paperwork says.
My worker sets some of their own hours. Doesn't that make them a contractor?
Not by itself. Virginia weighs several factors, above all whether you control how the work is done. One favorable fact does not settle it if the overall picture shows you directing the means and methods.
Do a subcontractor's workers count toward my number?
Yes. Virginia counts a subcontractor's employees along with your own when deciding whether you have more than two, even when the sub carries its own coverage. Using subs can push you into a mandatory policy.
Can I be liable for my subcontractor's injured workers?
Yes. As a statutory employer, a general contractor or owner who subcontracts work that is part of its business can owe comp to an uninsured sub's injured workers. 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, count and 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 Virginia owners choose Morrow
- We shop the right market for you. In Virginia 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 (the Virginia Workers' Compensation Insurance 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 Virginia guides
Every Virginia 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 Virginia (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?
- Virginia general contractor workers comp
This guide is general information, not legal advice. Virginia rules and penalty amounts can change, so verify current requirements with the Virginia Workers' Compensation Commission or a licensed advisor before you rely on them. Last updated: July 2026.