Quick facts: Washington
- Default rule
- All workers get workers' comp unless exempt
- Construction test
- All parts must be true (RCW 51.08.181)
- Registration alone
- Does not make someone independent
- If you get it wrong
- Unpaid premiums, penalties and interest
- Agency
- L&I
Fees, rules and rates change, often on July 1 and January 1. Verify every item with the responsible agency before you rely on it.
Short answer: In Washington, a construction worker is covered by workers' comp unless every part of L&I's test is true, including that the person is registered as a contractor. A 1099 and a contractor registration number are not enough on their own. If a worker fails any part, you owe the premiums, with penalties and interest.
Updated October 12, 2026. Requirements and fees change; confirm with the agency named on this page.
Paying a helper on a 1099 feels simpler than running payroll. In Washington construction it is also one of the most expensive mistakes a new contractor can make, because L&I starts from the assumption that the person is your worker and makes you prove otherwise. This guide explains the test and what it costs to fail it.
Who counts as an employee for workers' comp in Washington?
Almost everyone who works for you. L&I says "All workers in Washington are entitled to workers' compensation unless they fit strict exemption definitions." Calling someone a subcontractor, or paying them on a 1099, does not change that.
What is the independent contractor test for construction?
It has several parts, and all of them must be true. L&I says "All 6 parts of this test (7 parts for construction) must be true." For people doing work that requires contractor registration, the test is in RCW 51.08.181. In plain English, the person must:
- Be free from your control or direction over how the work is done. The statute begins: "The individual has been, and will continue to be, free from control or direction over the performance of the servic[e]".
- Do work outside your usual course of business, or do it away from all of your places of business, or pay the costs of their own principal place of business.
- Be "customarily engaged in an independently established trade, occupation, profession, or business".
- Be responsible for filing a schedule of business expenses with the IRS.
- Hold an active Department of Revenue registration and a UBI number for their own business.
- Keep "a separate set of books or records" for the business.
- Hold a valid Washington contractor registration, or a plumbing or electrical contractor license. L&I lists: "The individual is properly registered as a contractor or has a valid electrical contractor license."
Is a contractor registration number enough?
No. L&I warns: "Having a UBI number or contractor registration number does not automatically make a worker" independent. A registered handyman who works only for you, on your schedule, with your tools and under your direction, can still be your worker for workers' comp.
What happens if you misclassify someone?
You pay their coverage after the fact. L&I says "If your worker doesn't pass all parts of these tests, you must provide workers' compensation." and "your business will be held responsible for unpaid premiums with penalties and interest." The general workers' comp guide adds: "You might have to pay someone else's workers' comp premiums" when a subcontractor does not pay its own.
A real subcontractor with its own employees should have its own L&I account. Check it in L&I's Verify tool before the job, and keep a copy. Our contractor lookup guide shows how.
What should a small contractor do?
- If you direct the work, set the hours and supply the tools, treat the person as an employee and set up payroll. See hiring your first employee in Washington.
- If you use true subcontractors, keep records showing each part of the test: their registration, UBI, business tax filings and separate books.
- Get a workers' comp account before the first hire. The Washington workers' comp guide covers rates and quarterly reports.
Unemployment insurance and federal tax use their own tests, which can come out differently. Ask the Employment Security Department and the IRS about those.
This guide is general education, not legal advice. Rules and fees change, so confirm the current requirement with L&I before you act.
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Common questions
Can I pay my helper on a 1099 in Washington construction?
Only if the helper passes every part of L&I's independent contractor test, including being registered as a contractor. If any part fails, Washington treats the helper as your worker and you owe workers' comp premiums.
Does a contractor registration number make someone an independent contractor?
No. L&I says having a UBI number or contractor registration number does not automatically make a worker independent. The person must also meet every other part of the test.
What is the penalty for misclassifying a worker in Washington?
L&I says your business will be held responsible for unpaid premiums with penalties and interest. You must provide workers' compensation for any worker who does not pass all parts of the test.
Sources
Official pages checked on 2026-10-12.
- lni.wa.gov/insurance/insurance-requirements/independent-contractors/
- app.leg.wa.gov/RCW/default.aspx?cite=51.08.181
- lni.wa.gov/forms-publications/f101-002-000.pdf