Can Florida Contractors Hire 1099 Subcontractors?
A lot of contractors in Florida don't fully understand how subcontracting works or what the law actually allows them to do.
One of the biggest misconceptions is that if you have a contractor's license, you can hire any crew you want, pay them as 1099 subcontractors, and have them complete the work under your license.
That's not necessarily how it works, especially for Division II contractors like roofing and HVAC contractors.
I recently attended a Construction Industry Licensing Board (CILB) meeting in Sarasota, Florida, where I witnessed a situation that made me realize how important it is for contractors to understand these requirements.
What Happened at the CILB Meeting in Sarasota
During the Division II portion of the meeting, a roofing contractor was appearing before the Board to qualify a third business entity.
The Board members were asking her questions about how she planned to supervise this third company while already operating her other businesses.
One Board member asked how many roofing jobs her first company, which she owned 100%, was currently completing each month.
She responded that the company was doing approximately one to two new roofs per month.
The Board member then asked how many employees her company had.
She explained that she was the only employee.
Naturally, the next question was whether she was personally performing the roofing work.
She said no, explaining that she subcontracted the work to different roofing crews.
The Board member then asked whether those crews were licensed roofing contractors or worked for licensed roofing companies.
She responded that they were not.
At that point, the conversation became much more serious.
The Board member expressed frustration that someone with approximately 10 years of experience in the roofing industry did not understand the requirements for hiring employees and subcontractors.
The issue was that she appeared to be using unlicensed independent crews to perform roofing work rather than employing the workers or subcontracting to properly licensed roofing contractors.
From what I heard during the meeting, the Board indicated that the licensing issue would be looked into. I don't know what happened afterward or whether any formal action was taken.
I wanted to write about this because I believe a lot of licensed contractors in Florida are operating the same way without realizing the potential consequences.
What Is the Difference Between an Employee and a Subcontractor in Florida?
To understand the issue, we need to look at Florida Statutes Chapter 489.
Florida Statute 489.103(2) — Definition of an Employee
Florida Statute 489.103(2) addresses employees working under licensed contractors.
Under this section, an employee may perform work within the scope of the employer's contractor license with the licenseholder's knowledge and permission.
The statute defines an employee based on several important requirements.
The individual receives compensation from the employer, works under the employer's supervision and control, and works for an employer that regularly deducts FICA and withholding taxes and provides workers' compensation as required by law.
In simple terms, this generally describes a W-2 employment relationship.
For example, a licensed roofing contractor can hire roof installers as employees. Those installers do not individually need roofing contractor licenses to perform roofing work within the employer's licensed scope.
The same general principle applies to an HVAC contractor employing HVAC technicians.
What Is a 1099 Subcontractor?
A subcontractor is different from an employee.
An independent subcontractor generally operates as a separate business or independent contractor that agrees to perform a particular portion of a project.
For example, a general contractor building a home might hire a separate concrete subcontractor to complete the foundation.
That subcontractor may provide its own workers, equipment, supervision, and materials and receive payment based on the subcontract agreement.
However, there is one very important distinction.
Being paid on a 1099 does not give someone permission to perform construction work that requires a Florida contractor's license.
A subcontract agreement, workers' compensation policy, LLC registration, or 1099 tax form does not replace a required contractor license.
Also, simply calling someone an independent contractor does not necessarily make that person one under employment and tax laws. The actual working relationship matters.
Florida Statute 489.113(2) — Can You Subcontract Work to an Unlicensed Contractor?
This is one of the most important sections of Chapter 489.
Florida Statute 489.113(2) allows certain unlicensed subcontractors to perform construction work under the supervision of a licensed contractor.
However, that permission comes with specific conditions.
The work must be within the supervising contractor's license, the licensed contractor must take responsibility for the work, and the subcontractor cannot independently perform work that requires a contractor's license under the categories listed in Section 489.105(3)(d)-(o).
These categories include regulated trades such as roofing, air conditioning, mechanical, plumbing, and sheet metal contracting.
This means supervision alone does not allow an unlicensed independent subcontractor to perform work that requires one of those licenses.
For example, a licensed roofing contractor cannot simply hire an unlicensed independent roofing company, supervise its workers, and assume that the roofing company's lack of a license is no longer an issue.
If the subcontractor is independently contracting to perform roofing work requiring a roofing contractor license, that subcontractor generally must be properly licensed.
Florida Statute 489.113(3) — Subcontracting Requirements
Another important section is Florida Statute 489.113(3).
This statute specifically identifies trade work that contractors generally must subcontract unless they hold the appropriate license.
The listed categories include:
Electrical
Mechanical
Plumbing
Roofing
Sheet metal
Swimming pool
Air-conditioning
There are specific exceptions discussed later in this article.
For example, having a general contractor license does not automatically authorize someone to perform every type of roofing, HVAC, or electrical work using their own employees.
These trades have separate licensing requirements, and the general contractor must generally subcontract the regulated work to an appropriately licensed contractor unless a statutory exception applies.
What Does DBPR Say About Roofing Subcontractors?
The Florida Department of Business and Professional Regulation (DBPR) has addressed this exact question.
In an official response titled "What are the requirements for a roofing subcontractor?", published August 19, 2020, DBPR states:
Roofing work cannot be subcontracted to unlicensed roofers. Roofers must be an employee of the licensed contractor or leased through a licensed employee leasing company.
Read the official DBPR response here
That answer makes the distinction very clear.
A licensed roofing contractor generally has three ways to arrange for roofing installation labor:
Hire employees. Employ the installers through a legitimate employment relationship, generally as W-2 employees.
Subcontract to a licensed roofing contractor. Hire a separate roofing business that has the appropriate contractor license.
Use a licensed employee leasing company. Obtain workers through an appropriate employee leasing arrangement as described by DBPR.
What a licensed roofing contractor generally cannot do is hire an unlicensed independent roofing crew as a 1099 subcontractor to independently perform work requiring a roofing contractor's license.
This is exactly why the situation I witnessed at the CILB meeting was so important.
Does the Same Rule Apply to HVAC and Other Division II Contractors?
The general licensing principles also apply to other regulated Division II trades.
Division II of the Construction Industry Licensing Board includes contractors such as roofing, air-conditioning, mechanical, plumbing, sheet metal, and swimming pool contractors.
For example, let's say you are a licensed Class A Air Conditioning Contractor.
You have a customer who needs a new air-conditioning system installed.
You can generally have your own employees perform the installation within your licensed scope.
You can also subcontract the installation to another properly licensed HVAC contractor.
However, you generally cannot hire an independent HVAC company that does not hold the required license and simply allow it to perform regulated HVAC installation work under your license.
The same concern applies to unlicensed independent subcontracting arrangements involving other regulated trades.
There are specific exceptions in Florida law, including certain swimming pool specialty arrangements under Section 489.117(4)(e), so contractors must evaluate the particular trade and work involved.
The important rule is that your contractor license does not automatically become your subcontractor's license.
How Is Subcontracting Different for Florida General Contractors?
This is where many contractors get confused.
Florida General Contractors, Building Contractors, and Residential Contractors are classified under Division I of the CILB.
Their licensing scopes differ from those of Division II specialty contractors.
Under Florida Statute 489.105(3), general contractors have broad authority to perform and contract for construction projects, subject to the restrictions in Section 489.113.
For example, a general contractor constructing a commercial building might subcontract different portions of the project to separate crews or companies.
These could include concrete, masonry, framing, drywall, and other work within the scope of the project.
Not every subcontractor working under a general contractor must independently hold a state contractor license.
Section 489.113(2) permits certain unlicensed subcontracting arrangements when the work is within the supervising contractor's scope, the contractor accepts responsibility, and the work is not subject to the separate licensing requirement described in that section.
But the rules change when a project involves regulated specialty trades.
Example: Building a New House
Let's say a licensed general contractor is building a single-family home.
The contractor may arrange for a framing crew to complete the wood framing, subject to applicable licensing, supervision, and other legal requirements.
The contractor may similarly arrange for concrete and masonry work.
However, when it comes to installing the electrical system, HVAC equipment, or plumbing, the general contractor generally must use appropriately licensed contractors for those trades.
Roofing also generally requires an appropriately licensed roofing contractor, although Florida Statute 489.113(3)(b) provides a specific exception for certain wood shingle, wood shake, asphalt shingle, and fiberglass shingle work on new buildings of the general contractor's own construction.
This exception does not mean that a general contractor can advertise or operate as a roofing contractor without the appropriate roofing license.
The takeaway is that a general contractor can subcontract a broad range of work, including certain work performed by unlicensed subcontractors, but cannot use that flexibility to bypass separate trade licensing requirements.
Why This Matters for Your Contractor License
Qualifying a construction company is a serious responsibility.
When you qualify a business, your responsibility does not end after you obtain the license or pull the permit.
You are responsible for properly supervising the construction operations within your role as the qualifying agent.
Hiring unlicensed independent subcontractors for work requiring a contractor's license can create serious compliance problems.
The fact that someone has been installing roofs or air-conditioning systems for 15 years does not automatically mean that person can operate as an independent licensed contractor.
Experience and licensing are two different things.
Before hiring a subcontractor, contractors should determine whether the work requires a license, verify the subcontractor's business is properly qualified where required, check insurance and workers' compensation compliance, and make sure the agreement reflects the actual working relationship.
Final Thoughts
The situation I witnessed at the CILB meeting in Sarasota was a reminder that even experienced contractors may misunderstand Florida's subcontracting laws.
If you are a licensed roofing or HVAC contractor, you generally need your installation work performed by your legitimate employees or by an appropriately licensed subcontractor. For roofing, DBPR also expressly recognizes licensed employee leasing arrangements.
If you are a general contractor, you have broader flexibility when subcontracting work, but you must still follow the licensing requirements for regulated specialty trades.
Just because you hold a contractor's license does not mean you can hire an unlicensed 1099 crew to perform any kind of construction work under that license.
Understanding the difference between employees and subcontractors is just as important as understanding the scope of your contractor license.
At Florida Exam Prep, our goal is not only to help contractors pass their exams but also to help them understand the responsibilities that come with becoming licensed.
Florida Statutes and Official References
Florida Statute 489.103(2) — Employee Exemption and Definition
Florida Statute 489.105(3) — Contractor License Classifications
Florida Statute 489.117(4) — Specialty Licensing Provisions and Exceptions
DBPR — What Are the Requirements for a Roofing Subcontractor?
Additional reading: 2025 Florida Contractors Manual, Chapter 2, pages 2-6, 2-20, and 2-26 through 2-30.
This article is provided for educational purposes and is not legal advice. Contractors should review current licensing, employment, workers' compensation, and trade-specific requirements before entering into subcontracting arrangements.
