The Ontario government changed the law as of January 1, 2013 to expand coverage in the construction sector in order to:
- improve health and safety
- level the playing field and
- help combat the underground economy in the construction sector
What is mandatory coverage in construction?
WSIB coverage is mandatory for the following people who carry on a business in construction:
- independent operators,
- sole proprietors,
- partners in partnerships and
- executive officers in corporations.
Who does the law affect?
Changes to the law mostly apply to independent operators, sole proprietors, executive officers in a corporation and partners in partnerships unless they are exempt.
There are two types of exemption:
Home renovators who work exclusively in home renovation and:
- work directly for the occupant or member of their family;
- are paid directly by the occupant or member of their family
- corporations and partnerships with workers
- corporations without workers but with multiple executive officers
- partnerships without workers
As well, one executive officer or one partner may apply for an exemption if that individual does not perform any construction work (periodic site visits are permitted). Only one person per company can be exempt.
For specific exemption criteria, see Policy 12-01-06.
If you are a sole proprietor, executive officer in a corporation or partner in a partnership in construction, how does the new law affect you?
If you have workers and are already registered as an employer, you must begin to include your own insurable earnings with your workers' earnings when you report premiums. Read details on insurable earnings in Policy 14-02.
If you are an independent operator in construction, what do you have to do?
If you are an independent operator and ONLY work in home renovation, you may qualify for the exemption. For the more details on exempt home renovation work, see Policy 12-01-06.
If your business changes and you take any contracts for construction work other than exempt home renovation work, you must register with the WSIB and have coverage.
How do the new rules affect WSIB clearance certificates?
Both the principal and the contractor/subcontractor have obligations for clearances starting January 1, 2013.
- Principals must get or require contractors/subcontractors to provide clearances before beginning any construction work.
- Contractors must have WSIB coverage, report and pay their premiums on time so they are eligible for a clearance.
Under the current law, you still have an obligation to register, report, and pay premiums. Charges and interest still apply when you do not obey the law.
What will happen if you do not register or get a clearance?
The change to the law requires principals to get a clearance from you before any work starts. If you miss work and do not have a clearance, the principal may refuse you entry to the jobsite until you have one. To qualify for a clearance, you must register and pay your premiums on time.
What coverage will WSIB provide that is different from private insurance?
Compared to no-fault insurance products, WSIB protects you from costly lawsuits and has predictable rates, tax-deductible premiums and reliable benefits.
WSIB’s benefits can be more comprehensive and cover a broader range of services. For instance:
WSIB pays up to 85% net wage loss
- Benefits include Loss of Retirement Income paid to injured workers from age 65
- Special allowances paid to severely impaired workers including Independent Living Allowance
- Work reintegration and retraining services if needed
- All necessary and appropriate health care costs are covered
- Survivor benefits can include lump sum and monthly awards for spouses and dependent children and all reasonable expenses paid for funeral and burial services
How much does the WSIB coverage cost?
The cost of coverage depends on earnings and your business activities. For more details and calculation of the WSIB coverage cost, please read about Mandatory Coverage.
What if your business has multiple rates and at least one is a construction rate?
Any employer involved in construction that has a construction rate group (Class G) must follow the mandatory rules. We encourage you to contact a tax professional to review your specific circumstance.
What if a firm has more than one classification rate?
It is more complex when a firm is multi-rated (has more than one business activity). In order to decide if a firm performs construction and non-construction activities, some factors are involved:
- size of payroll
- ability to segregate payroll across the multiple business activities,
- if there is contracting out of construction activities, etc.