Contractor vs. Sub-Contractor – Blog Post

Do you want a Contractor vs. Sub-Contractor on your Property?


The IRS has guidelines to define Employees (W-2) vs. Independent Contractors.

Why do Companies use Sub-Contractors?

  • Avoid paying payroll taxes
  • Avoid paying worker compensation insurance costs
  • Avoid health insurance costs
  • Avoid overhead costs for trucks and equipment
  • No exposure for unemployment filings

These are huge expenses for employers, therefore according to the IRS, 1099 workers must:

  • Work for multiple firms
  • Provide all their own equipment, vehicles and attire
  • Provide their own workers compensation insurance
  • Provide their own health insurance

A contractor cannot tell the 1099 workers:

  • How, when and where to work
  • Properly train the workers
  • Hire or fire workers
  • Supervise the worksite
  • Teach and enforce proper safety requirements
  • Inspect for quality
  • Require company attire


At AAA Painting Contractors, all of our staff are W-2 employees. It is more expensive, but the right way to manage our production team. We want our team to feel as a valued asset to our company. AAA provides the proper insurance coverage for workers compensation and health Insurance.