Is it illegal to use 1099 technicians?

No. Independent contractor relationships are legal when the worker genuinely meets the applicable test. The risk comes when a worker is paid as a contractor but the working relationship looks like employment under federal or state rules.

What is California's ABC test?

Under California law (AB 5 and later amendments), a worker is presumed to be an employee unless the hiring entity shows the worker is free from its control, performs work outside the usual course of its business, and is customarily engaged in an independently established trade or business. Construction has specific rules, including requirements tied to contractor licensing.

What should a GC ask a labor subcontractor for?

Certificates of insurance for general liability and workers' compensation naming you as certificate holder, proof of any required state contractor license, confirmation of how workers are classified and paid, and a contract with indemnification for classification and wage claims.

W-2 vs 1099 Crews: Misclassification Risk for GCs

Why this is the GC's problem, not just the subcontractor's

Three exposures can travel up the chain to the general contractor or integrator:

Workers' compensation. In many states, if a subcontractor has no workers' comp and one of its workers is injured, the claim can fall on the general contractor's policy. That is why comp certificates matter more than any rate.
Wage and hour claims. If individual 1099 technicians are really working as employees — set hours, your tools, your supervision, paid by the hour, no business of their own — they may bring claims for overtime and benefits. Depending on the state and the facts, the party that controlled the work can be named.
Payroll tax. Unpaid employment taxes on misclassified workers.

The tests, briefly

Federal (IRS): a common-law test of behavioral control, financial control and the relationship of the parties.
Federal (wage and hour): an economic reality test of whether the worker is in business for themselves. The Department of Labor's guidance has changed several times in recent years.
California: the ABC test from AB 5, with a construction-specific framework that relies heavily on contractor licensing. See also our Silicon Valley page.
Other states: a mix. Several use an ABC-style test for unemployment insurance even if they use a looser test for other purposes.

The pattern that creates risk

A GC or integrator needs 20 techs fast, finds 20 individuals, pays each as a 1099 at an hourly rate, directs their work, supplies their materials, books their lodging, and sets their shifts. Each of those facts points toward employment. Together, they make a hard case to defend.

Lower-risk structures

Structure	Classification risk to GC	Comp exposure to GC
Your own W-2 employees	You manage it directly	Your policy, as normal
Staffing agency (agency is employer)	Low	Low if agency is insured
Labor subcontractor with own insurance	Low	Low if comp certificate is valid
Individual 1099s, directed by you	Highest	High if they carry no comp

What to ask any labor provider for

Certificate of insurance: general liability and workers' compensation, current, with you as certificate holder
Proof of any required state contractor license for the scope
How workers are classified and paid
A written subcontract with indemnification for classification and wage claims
Proof that the provider, not you, controls day-to-day supervision

Hardline structures crews so that supervision, payroll and insurance sit with us, and provides certificates with every quote.

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FREQUENTLY ASKED

Is it illegal to use 1099 technicians?: No. Independent contractor relationships are legal when the worker genuinely meets the applicable test. The risk comes when a worker is paid as a contractor but the working relationship looks like employment under federal or state rules.
What is California's ABC test?: Under California law (AB 5 and later amendments), a worker is presumed to be an employee unless the hiring entity shows the worker is free from its control, performs work outside the usual course of its business, and is customarily engaged in an independently established trade or business. Construction has specific rules, including requirements tied to contractor licensing.
What should a GC ask a labor subcontractor for?: Certificates of insurance for general liability and workers' compensation naming you as certificate holder, proof of any required state contractor license, confirmation of how workers are classified and paid, and a contract with indemnification for classification and wage claims.

W-2 vs 1099 crews: the misclassification risk for general contractors