Cable Installers, are you an employee or a 1099 contractor?  (Or “The elephant hiding in the closet”)

There is a vast movement afoot in the cable and satellite installation industry to have cable installers become a 1099 contractor rather than an employee of the cable company.   See “Consider the Cable Guy”: The Grind Investigation Fund. Many major cable companies are requiring their employees to make this change involuntarily. Why you might wonder?

Well, this is a very effective cost cutting measure for the cable companies. They need people to install the systems, wiring and equipment that operate and control the media service they are selling.  This job cannot be performed without a human at this point in time. However, if cable companies utilize a fleet of 1099 contractor’s as cable installers instead of employees:

• It reduces the employer’s costs considerably as the employer no longer collects or pays FICA or federal and state income tax on the cable installers.
• Cable companies does not pay employer taxes in to the government.
• Cable companies often charge the 1099 contractor cable installers for such things as uniforms, tools, equipment and use of a truck. Conversely, as an employee, the installer would most likely have received those items at no cost from the employer. These measures both reduce the cost and bring in revenue from the contractor.
• A Cable companies also save vast amounts of money on reduced insurance payments as the burden of carrying certain types of commercial insurance switches to the 1099 contractor.  This reduces the number of employees and conversely reduces the premium cost for the employer as well.

So, if a cable installer begins working as a 1099 contractor they really are functioning as any small business owner would. The installer will need all the types of insurance that any company in the cable  installation business should carry including general liability, errors and omissions, business property, inland marine, commercial auto (if you are furnishing the vehicle), commercial property and loss of business income and perhaps an umbrella policy or a technology  policy.   As a 1099 contractor, you can obtain these as part of a business owner’s package or as standalone policies.

You should speak with your agent to gain knowledge about the best options for cable installers within the Class Codes your business comes under listed below:

Business Liability Category: TV and Media Installation

SIC Business Insurance Codes:

•   4841- Cable and Other Pay TV Services

NAICS Liability Classifications:

•   517110- Wired Telecommunications Carriers
  •   515210- Cable and Other Subscription Programming

Business ISO General Liability:

•   Code: 91315- Cable and Subscription TV Companies

Common Workers Compensation Class Codes:

•   7536- Cable Installation and Construction
•   8901- Cable and Telecommunications- Office Employee
•   7600- Cable TV or Satellite- Other Employees and Drivers
•   6325- Conduit Construction- For Cables or Wires
•   8742- Outside Sales Persons
•   Code: 91315- Cable and Subscription TV Companies
•   Code: 91315- Cable and Subscription TV Companies

Plus, as a 1099 you will need health insurance which covers your own health needs.  This means obtaining health insurance which is most likely not part of a group plan in most cases.  Individual health insurance is usually very expensive no matter who the insurance carrier may be.  An alternative is to join a union or an association of workers in this field that offers health insurance to its members thus forming a group (E.g. Communication Workers of America).

But the biggest concern related to insurance is Workers Compensation.

Since you no longer are an employee, just as you are no longer covered by the Cable Company’s group health plan, you are no longer entitled to worker’s compensation through your client the Cable Company.   That means even if you get hurt on the job while installing for the cable company at a property you were sent to by the cable company you are not covered by Workers Compensation. (There is that elephant hiding in the closet with a not so great surprise!)

Whether your required to carry Worker’s Compensation insurance for yourself (as a single employee) is another question altogether and depends on many things. Some states require that a single employee company carry workers compensation while other states do not. In some states you are exempt if you have less than 4 employees. Some states exempt members of an LLC.   Whether it is required by the state should not be the end of the inquiry because if you don’t cover yourself for Workers Compensation, no one else is, and you may be definitely letting the elephant loose to trample you if you are injured severely on the job. Additionally, your old employer (the cable company) who is your “client” who sends you out to cable company users homes to do installations can and often does require that you carry workers’ compensation and that you make the cable company an additional insured on your policy when you go out to install systems for their customers.

You may think you are covered by your own health insurance that you just bought, however; many times your health insurance carrier will deny coverage if you were injured on the “job” and if you don’t have workers compensation the injury is not covered at all unless a third party  or the cable company was negligent.

This can be quite a tragedy if you are injured and have not obtained the insurance needed to protect you.  The Bureau of Labor Statistics shows that 3 million workers were injured on the job in 2014.  So if you find yourself in the position of a new 1099 contractor make obtaining commercial insurance one of your top priorities.