The IRS is not after you to change your 1099 workers to W-2 employees. The state of New York is not after you to provide unemployment insurance. Why is the New York City Dept. of Buildings after you about using 1099 workers instead of W2 employees? Because you’re a licensed electrician. And the New York City Administrative Code bars licensed electricians from using independent contractors to perform work under the license. NYC Administrative Code § 27-3017(1) and § 27-3004. There’s your answer.