Originally Posted by clipfert
All you are doing is giving them a discount on your services. A pretty big one at that if they are taking a percentage of your gross that you are invoicing them for. Besides that if you of someone were to get hurt on their site you will be hard pressed to recoup any medical exp or lost wages. Their WC policy covers their employees not their subs. Ask your agent he will enlighten you.
Basically what they are doing is covering their end for when they get their WC audit. If they are paying you on a 1099 and they cannot show that you have WC coverage then they must pay the premium on that amount they paid you.
Clipfert, you have given some good advice and I appreciate it. I don't exactly understand why their policy would not cover me (if it is paid in) regardless of whether I am a considered subcontractor or an employee. I don't know how they are categorizing me, but I receive a 1099 and not a W2so I would say its a subcontractor.
I was involved in the building trades for a number of years and I always kept 3-4 regular employees and a host of subcontractors. I don't recall ever being questioned over who was what. If memory serves me correctly the insurance co's only concern was who performed what task so they could be rated and paid for correctly. (ie; a roofer would have a higher rate than a painter).