January 1, 2013 brought about big changes for those working in Ontario’s construction sector. Executive Officers, partners in a partnership and independent operators who work in the construction sector, now require coverage by the Workplace Safety and Insurance Board (WSIB).
Until December 31, 2012, employers in the construction sector who had at least one worker (full- or part-time) were required to register for coverage with the WSIB and pay premiums on behalf of their workers. Executive officers (as defined by WSIB’s criteria), partners in a partnership and independent operators (when ruled as such by the WSIB) were not required to have coverage. Employers who contracted with independent operators could either pay premiums on behalf of those independent operators, thus treating them as workers and assuming liability for any workplace injuries, or obtain an independent operator ruling from the WSIB. An individual who met the WSIB’s criteria for an independent operator, was exempt from coverage.
As of January 1, 2013, the WSIB expanded coverage in the construction industry to include those previously excluded. Following are some highlights of the changes:
- Companies must now pay premiums on behalf of their Executive Officers, and may exempt only one executive officer from coverage. In order to be exempt, the Executive Officer may perform only administrative duties on behalf of the corporation and may not perform any construction work. Employers need to complete a specific form (Form 1208WA) to apply for this exemption.
- The WSIB has established a new rate group for nonexempt executives, and companies need to complete a specific form (Form 1209WA) to request coverage under it. The premium rate for the new Rate Group 755 for 2013 is 21 cents per $100 of insurable earnings.
- A partnership may exempt one partner from coverage, but premiums must be paid on behalf of the other. Once again, the exempt partner may not perform construction work, and must only perform administrative duties on behalf of the partnership.
- Those individuals in the construction sector meeting the WSIB’s criteria for independent operator status are no longer exempt from coverage, and are required to register their own account and maintain coverage. Those who contract with an independent operator may now obtain a clearance certificate from the independent operator, confirming registration with the WSIB and that the account is in good standing. Changes to the Workplace Safety and Insurance Act make the principal of the contract liable if they fail to obtain a clearance certificate.
The changes above apply only to those who do not work exclusively in home renovation. Employers performing only home renovation work will be required to maintain registration and premium remittances on behalf of their workers, but will not be subject to the expanded coverage for executive officers and partners in a partnership. Independent operators working exclusively in home renovation are also exempt from coverage and are not required to register. However, if any of these parties performs other construction work in addition to home renovation work, registration and premium remittance is required.
Failing to register with the WSIB within 10 days of becoming an employer is an offence under the Workplace Safety and Insurance Act, carrying a maximum penalty of $100,000 plus a 25 per cent victim surcharge. The WSIB has established a permanent partial amnesty for employers who voluntarily register for coverage, but have missed the deadline by which they should have registered. The partial amnesty protects them from prosecution, and limits the amount of retroactive premiums the WSIB will seek to recover. Employers identified by the WSIB as having failed to register are not eligible for the partial amnesty and may be subject to significant retroactive premium charges, plus interest, as well as the possibility of prosecution.