Mandatory WSIB Changes for 2013
As discussed in prior additions of Profit Clue, Bill 119 will be in effect January 1, 2013 and is fast approaching. The Workplace Safety and Insurance Act, 1997 (the “Act”) previously allowed for optional WSIB insurance coverage for independent operators, sole proprietors, partners in partnerships and executive officers of corporations in the construction industry. Bill 119 makes insurance coverage mandatory for these persons effective January 1, 2013.
On January 1, 2012, a free voluntary one-year pre-registration period commenced during which those parties affected by the changes are able to register electronically on the WSIB website. Premiums are not due until January 1, 2013 and WSIB will contact individuals at the end of 2012 to confirm registration before the WSIB account is activated for coverage in 2013.
After January 1, 2013, independent operators, sole proprietors, partners in partnerships or executive officers of a corporation will be required to register with WSIB within ten days of occupying one of these construction employment categories.
There is a special exception available for partners/executive officers in the construction industry. One executive officer or partner in construction businesses is allowed to apply for exemption from coverage. This must be a person who does not perform any construction work on a building site, including on-site supervision. An individual eligible for the exemption must complete a declaration certifying they are indeed eligible for the exemption.
An executive not performing construction duties and not eligible for the exemption may be subject to a new, separate WSIB rate class (0.21% of insurable earnings for 2013). If this new rate category is desired, a special request form must be completed by an authorized representative for the partnership/corporation and sent in to WSIB. Insurable earnings of an executive officer also include any dividends declared by the employer to the individual. The WSIB maximum insurable earnings ceiling for 2013 is $83,200 which represents an increase of 1.8% from 2012.
What Does This Mean?
The person who retains a contractor or subcontractor is required to ensure the contractor or subcontractor complies with all payment obligations under the Act. That person may become liable in cases of non-payment or non-compliance.
The person who retains a contractor or subcontractor to perform construction work is required to obtain a clearance certificate from WSIB showing the contractor has registered with WSIB and has complied with all obligations under the Act. A contractor or subcontractor is prohibited from performing construction work for a person without a valid clearance certificate. This person must retain the clearance certificate for a period of at least three years and it must be produced at the request of WSIB.
These requirements do not apply to a person who directly retains a contractor to perform home renovation work.
Failure to comply with Bill 119 may result in a personal conviction with a $25,000 fine. A corporation may be liable for a fine in the amount of $100,000 for non-compliance.
Considerations for Employers for These Changes
Written contracts with contractors which establish nature of the business relationship between employer and contractor
Obtaining a clearance certificate during the bidding process, during work and at the conclusion of the work
Contact your DJB professional to ensure you are compliant with the WSIB changes in the construction industry.