EOR vs 1099Policy

Stop paying 20% more to convert contractors into W-2s. Keep them 1099.

An EOR converts your contractor into a W-2 employee, stacking payroll taxes, benefits, and overhead on top of their pay, and ending their independent-contractor status. With 1099Policy, contractors stay 1099 and carry their own coverage, in their own name.

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Status quo · EOR

Reroute the IC through an Employer of Record

A.k.a. converting them to a W-2 they don't want, paying for benefits they don't need.

20%
of contractor pay per engagement
  • Forces W-2 conversion, kills 1099 status
  • Adds payroll, benefits, PTO overhead
  • Locks contractor to single engagement
  • Months to onboard, weeks to terminate
  • Coverage in EOR's name, not contractor's
  • Overkill for a genuinely 1099 workforce
1099Policy

Issue insurance to the contractor in their own name

Coverage stays in the contractor's name. They stay 1099, you stay clean and compliant.

Direct
no markup, pricing tailored per platform
  • Contractor stays 1099, full independence
  • WC, GL, media liability, all in their name
  • Per-gig, per-day, or per-engagement
  • 45 seconds to bind, instant to terminate
  • Audit-ready COIs delivered to your platform
  • Reinforces 1099 status under the ABC test
Run the math

What does converting your contractors actually cost?

500
$75,000
What EOR is costing you annually
20% markup on every contractor engagement, and teams typically cut this by up to 80–95% with 1099Policy
$7,500,000
Where the two differ

An EOR makes them an employee. With 1099Policy, they stay a covered contractor.

FeatureEORW-2 conversion1099PolicyStays 1099
What it doesEmploys the worker as a W-2 employeeHelps independent contractors obtain coverage
Worker's statusBecomes an employee of the EORRemains an independent contractor
Insurance ownershipEmployer-ownedContractor-owned
Workers' compCovered under the employer's policyIn the contractor's name (where available)
General liabilityCovered under the employer's policiesIn the contractor's name
Professional & media / E&OTypically a separate policyAvailable in the contractor's name
Certificate of Insurance (COI)Not typically issued by the workerIssued in the contractor's name
Additional insured endorsementsNot typically contractor-specificAvailable on issued COIs
Per-assignment coverageNot designed for assignment-level coverageBuilt for assignment-level coverage
Classification analysisNot required, worker is engaged as an employeeContractor status remains independent
Cost modelPayroll taxes + benefits + EOR feePriced per engagement
Added costTypically 20%+ above worker payA fraction of employment conversion
Coverage issuance & verificationNo contractor-owned coverage to issueIssue and verify coverage via API
Common questions

What teams ask before leaving an EOR.

Where an EOR still makes sense, what it costs, and how contractors stay 1099 without a coverage gap.

An EOR alternative is any approach that gives you the compliance outcomes of an employer of record, coverage, audit trail, and risk transfer, without converting contractors into W-2 employees. 1099Policy does this with per-assignment insurance issued in the contractor's own name, plus continuous compliance tracking.

Most EORs charge a flat monthly fee per worker, typically a few hundred dollars, or a percentage of the worker's pay, on top of payroll taxes and statutory benefits. For US-based independent contractors, that stack often costs more per month than per-assignment insurance costs for a quarter.

Use an EOR when you need to employ someone, such as cross-border hires or roles that fail contractor tests. Keep workers 1099 when they're genuinely independent. The deciding question isn't cost, it's whether the working relationship is actually employment.

Classification depends on the working relationship, not on which vendor you use. What 1099Policy adds is evidence of independence: contractors carrying their own coverage, in their own name, is one supporting signal of contractor status, and every policy and COI is documented for audit.

Yes. Contractors come off the EOR's W-2 payroll and back onto your 1099 workflow. Coverage binds per assignment through the API or dashboard, and certificates issue before the next engagement starts, so there's no coverage gap and nobody is re-onboarded as someone else's employee.

Workers' compensation, general liability, and specialty lines including professional, media, and cyber, issued per assignment. Workers' comp is available in 46 states plus DC. North Dakota, Ohio, Washington, and Wyoming are monopolistic states where coverage comes from the state fund.

Call to action section for 1099Policy

Bring your last EOR invoice. We'll do the math live.

Teams typically cut their contingent-labor insurance line by up to 90% in the first 60 days. Share your engagement data, we'll show you the savings.

Book a savings review →Download the comparison PDF