Why your 1099 crew is your employee under Florida workers' comp law, and what it costs when the Division agrees

By Adrian Middleton · Friday, October 9, 2026

The rule

Section 440.02(18)(c), Florida Statutes, says "employee" includes all persons being paid by a construction contractor as a subcontractor, unless the subcontractor has validly elected an exemption or has otherwise secured coverage, and includes an independent contractor working in the construction industry. There is no six-factor test in construction. The only questions are whether the person was paid and whether a certificate or policy covered them on the dates of payment.

What the Division does with it

When an investigator finds a crew on a 1099, the penalty worksheet treats every dollar paid to them as uninsured payroll at the trade's class code, doubled. If the employer told the investigator or the carrier that the crew were independent contractors, section 440.107(7)(f) adds $5,000 per worker.

The three ways out, and what each requires

• A valid exemption. The worker is an officer of a corporation or an LLC member owning at least 10 percent, listed on Sunbiz, with a current certificate naming that entity. Construction companies may exempt no more than three officers. Keep the certificate; verify it on the Division's database.
• The sub's own policy. A Florida policy in force on each payment date, with a certificate of insurance collected before work started (Rule 69L-6.032).
• Your own policy covering them. Report the 1099 payroll to your carrier and pay the premium. Hiding it is the section 440.107(2) "deemed" case with the 24-month lookback.

The shell LLC

"Every man on my crew is the officer of his own LLC with an exemption" works only if each LLC is a real business with no employees of its own. A helper brought along by an exempt sub is the general's employee if the sub has no policy. And coercing workers to form entities and file exemptions as a condition of employment is itself a misdemeanor under section 440.105(2)(a)1.

If you have already been served

The 1099 question is where most penalty worksheets are won or lost. Records showing which payments went to insured subs, exempt officers, vendors and fabricators take those dollars off the sheet. The penalty audit page explains the method; the pre-submission audit does it on your actual books before anything is produced.