FTR Now
WSIB to Enforce Mandatory Construction Coverage Starting January 1, 2014
Date: December 6, 2013
Effective January 1, 2014, the Workplace Safety and Insurance Board (“WSIB”) will begin enforcing mandatory coverage for certain categories of persons operating in the construction industry and prosecuting those persons who are not in compliance.
This FTR Now provides the background to the recent amendments to the Workplace Safety and Insurance Act (“Act”) relating to mandatory construction coverage, the consequences of non-compliance and some recommendations for employers.
THE BACKGROUND
In our FTR Now of March 7, 2012, “Bill 119 – What You Need to Know“, we outlined amendments to the Act which made insurance coverage mandatory for certain categories of persons operating in the construction industry (independent operators, sole proprietors, partners in partnerships and executive officers of a corporation). Mandatory coverage for those categories of persons became effective on January 1, 2013, at which point the applicable persons were required to register with the WSIB and meet clearance certificate requirements.
CHANGES EFFECTIVE JANUARY 1, 2014
When the changes came into effect, the WSIB indicated that it would not prosecute anyone who failed to comply with these new requirements until January 1, 2014.
Effective January 1, 2014, any contractors or subcontractors who have not registered with the WSIB and who continue to work without a valid clearance certificate number may face serious penalties and fines. Generally, anyone who purchases construction services or hires contractors without confirming the contractor has a valid clearance certificate number may also be subject to both penalties and fines.
More specifically, failure to comply with these new requirements may result in the person being guilty of an offence under the Act which can be prosecuted under the Provincial Offences Act. A person convicted is liable to a fine not exceeding $25,000 or imprisonment not exceeding six months or both. A corporation is liable to a fine not exceeding $100,000 upon conviction for each offence.
In addition, Section 141 of the Act provides that the person who directly retains the contractor or subcontractor who fails to pay WSIB premiums or who has outstanding amounts owing, may be deemed to be liable.
RECOMMENDATIONS FOR EMPLOYERS
As we stated in our earlier FTR Now, employers which currently have a policy in place covering contractors and subcontractors should extend the policy to ensure compliance with these recent amendments to the Act. Those which do not have a policy should develop one.
In either case, it is recommended that at a minimum:
- employers should have written contracts with contractors which establish the nature of the business relationship;
- employers should obtain a clearance certificate with a valid clearance certificate number at the commencement of the tendering/bidding process, at the commencement of work, during the work and at the conclusion of work;
- employers should establish contract hold-backs for their protection where a contractor or subcontractor is not in compliance with the Act; and
- employers should be invoiced for work on a regular basis and the invoicing document should include separate charges for labour, expenses and applicable taxes.
Should you have any questions regarding these new requirements or any other WSIB issues, please contact any member of our Workplace Safety and Insurance Practice Group.
The articles in this Client Update provide general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Hicks Morley Hamilton Stewart Storie LLP and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Hicks Morley Hamilton Stewart Storie LLP. ©
