Staffing & trust · updated August 2026
W-2 Employees or Subcontractors: Why It Is Your Problem Too
Reputable commercial janitorial firms in New York use W-2 employees. The 1099 and subcontracted-crew model persists at the low end and inside some franchise unit structures — and it transfers real exposure to you. If an uninsured contract worker is injured in your suite, joint-employer and premises theories can put that claim on your desk, and your building's insurance schedule applies to whoever is physically on site.
Why the Price Gap Exists
A W-2 cleaner costs an employer wages plus payroll taxes, workers' compensation, New York statutory disability, unemployment insurance and, on covered sites, supplemental benefits. On a prevailing-wage-covered site that totals $48.19 an hour before the company spends anything on supervision or equipment. A 1099 arrangement removes most of that from the vendor's cost base. That is where an unusually low bid comes from.
What It Exposes You To
- Injury claims. An uninsured 1099 worker hurt in your space has no workers' compensation to turn to, and will look for a defendant who does.
- Coverage gaps. A subcontractor is generally not covered by the prime's general liability policy unless properly endorsed — so the certificate you filed may not cover the person actually in your office.
- Building handbook violation. Insurance and screening requirements apply to whoever is on site. If the prime subcontracts without disclosure, your building's requirements are not being met.
- Screening gaps. A subcontractor's crew is screened by the subcontractor, if at all. Nobody at the building is checking.
The Franchise Disclosure People Miss
Several national cleaning brands operate as master franchisors. You sign with the master, which handles billing and support; the actual cleaning is performed by a unit franchisee — an independent small business that bought a territory and your account. If that unit franchisee gives up the account, your crew can change with very little notice while your contract with the master continues. How the franchise model works.
The Four-Document Verification
- A redacted payroll register showing the people on your account.
- New York workers' compensation certificate — form C-105.2.
- New York disability benefits certificate — form DB-120.1.
- A written statement of whether any portion of the work is subcontracted, and to whom.
Then ask one question plainly: who signs these workers' paycheques? Not who supervises them — who pays them.
New York applies a common-law right-of-control test to classification. The industry-specific Fair Play Acts that impose stricter ABC-style presumptions cover construction and commercial goods transportation — not building services. Misclassification exposure still runs through the State Department of Labor, the Workers' Compensation Board, the IRS and private wage-and-hour claims, and the Wage Theft Prevention Act provides liquidated damages of up to 100% of unpaid wages plus fees.
Last reviewed August 2026. Figures for prevailing wage and regulatory schedules change on 1 January and 1 July — we re-verify this page each cycle.
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