Policy on Subcontractors

Policy on Independent Contractors, Subcontractors and Contract Labor

The AGCSIF charges premium on every subcontractor who has not provided our member with a Certificate of Workers’ Compensation Insurance for the period worked. There are no waivers, Form-4’s, or other contractual agreements that can be submitted that are acceptable to the Fund. Only proper certificates for the time period the work is performed excludes these subcontractors. This includes, but is not limited to, sole proprietorships and partnerships with no employees, other subcontractors, independent contractors, and contract/casual laborers with no employees and/or no certificates of workers’ compensation insurance. See your policy, Part Five-Premium, Section C, #2 located on page 6.


The Workers’ Compensation coverage for uninsured subcontractors is automatically provided under the AGC/SIF policy issued to the AGC/SIF member with premium charged accordingly for the coverage of the uninsured subcontractor to the AGC/SIF member.

Premium Computation For Uninsured Subcontractors

If the contractor does not provide satisfactory evidence that the subcontractor had workers’ compensation insurance in force covering the period the work was performed, additional premium shall be charged as follows:

The full subcontract price will be used for premium computation purposes unless:
  • A complete payroll record of the employees of the uninsured subcontractor is provided. If provided, the actual payroll will be based on the classifications which would have applied if the employees of the subcontractor had been employees of the contractor. Note: Subcontractors working for your Uninsured Subcontractors are not automatically covered under your AGC/SIF Workers’ Compensation policy. Please contact the Fund Office for clarification if needed.
  • If invoices submitted to the contractor from the uninsured subcontractor discloses that a definite amount of the full subcontract price represents payroll, such amount shall be the payroll for the additional premium computation. In contracts for labor and material, the payroll shall not be less than 50% of the subcontract price. Invoices must be on the subcontractors own letterhead, providing actual breakdowns. Only actual invoices are acceptable, not letters stating or estimating material costs. Estimated percentage breakdowns are not acceptable. Additional premium will be based on the classifications which would have applied if the employees of the subcontractor had been employees of the contractor.
  • If an experience modification has been established for the contractor, such experience modification shall be applied to the premium developed for the uninsured subcontractor.

Contract or Casual Laborers

All workers hired and paid without tax deductions are considered contract laborers or casual laborers. If an accident occurs, these laborers may be eligible for Workers’ Compensation benefits. As a result of this, additional premium is developed based on total amounts paid to these laborers. Additional premium will be based on the same classifications which apply to your employees based on work performed.

If your company hires a subcontractor from OUT-OF-STATE, a certificate of insurance from the subcontractor must specify coverage for the state of Kentucky (if the work was performed in Kentucky). If not, the subcontractor will be treated as an uninsured subcontractor.