"as in what defines an employee or a subcontractor in terms of rate/unit etc. of pay."
Paying Hourly is not really part of this. I charge by the hour, for instance.
Employee or Independent Contractor includes some tests to examine the relationship. Examples are Fed and State, like this:
Do they work for other general contractors, or just you?
Do they have their own tools and equipment?
These are part of the "are they Independent" and running their own Business, test.
If they do something wrong, or damage the property, or break equipment, who is liable for fixing it? This is part of the "At Risk" test."
As for Worker Comp, in some States, you still are liable for WC when the independent contractor is on your job site, anyway. WC is not a test. It is a fact of doing business.
Worker Misclassification is a Huge concern; your own Job Service or Work Force Center or Dept of Labor can help you. You might have had it wrong all along.