Virginia Subcontractors: Employee Counts and Workers’ Comp Review
A Virginia contractor cannot decide whether it needs workers’ compensation simply by counting names on its own payroll. Relevant subcontractor employees can also count toward the statutory employee total.
The Virginia Workers’ Compensation Commission contractor guidance explains the usual threshold as regularly employing more than two people. It also describes counting subcontractor employees performing the contractor’s trade, business or occupation, or fulfilling its contractual obligation.
Start with the full labor chain
List direct workers and the employees supplied through relevant subcontracts. The Commission’s guidance includes part-time, full-time, seasonal and certain other workers within the broad employee concept. Do not assume that a short work schedule or a subcontractor invoice automatically removes someone from the review.
A statutory-employer assessment depends on the arrangement. If you are unsure whether a subcontracted activity belongs in the count, have the insurer or counsel review the work obligation rather than deciding from the vendor’s job title alone.
Subcontractor insurance does not erase the count
The Commission expressly distinguishes the coverage threshold from the subcontractor’s own insurance. A contractor can require its own policy based on the combined workforce even when the subcontractors also carry coverage.
Those subcontractor policies still matter. Retaining current evidence helps establish who insured the work and supports the premium audit. The correct process therefore includes both a workforce-count review and a separate insurance-document review.
A hypothetical project count
Imagine a builder with one direct employee. It hires an electrical subcontractor with one employee and a plumbing subcontractor with one employee to fulfill the building contract. Under the Commission’s illustrated approach, the contractor needs to consider three workers, not just the one on its payroll. The fact that each subcontractor presents a certificate does not independently eliminate the builder’s coverage requirement.
This is a simplified example based on the agency’s explanation. Real arrangements may involve additional facts requiring review.
Record changes as the project changes
At onboarding, ask each subcontractor who will work, whether it will hire other businesses and which policies cover its employees. Revisit the count when another subcontract is added. Keep policy dates and any lapse or replacement evidence tied to the dates the company performed work.
Use the Virginia state requirements guide alongside the workers’ comp audit subcontractor worksheet. The subcontractor onboarding checklist helps make workforce questions part of initial approval rather than an audit-time surprise.
Source checked November 3, 2026. Ask the Commission or an adviser how statutory employment applies to your contracting arrangement.
Frequently asked questions
What is Virginia’s usual workers’ comp employee threshold?
The Commission says employers regularly employing more than two employees need coverage. Relevant subcontractor employees may count toward that total.
Can insured subcontractor workers be ignored when counting Virginia statutory employees?
No. The Commission explains that a contractor may still need its own coverage when direct and statutory employees reach the threshold, even when subcontractors have policies.