Mandatory WSIB Coverage for Construction Industry, January 1, 2013

Effective January 1, 2013, amendments to the Workplace Safety and Insurance Act, 1997 (the “WSIA”) will expand mandatory coverage requirements in the construction industry. While employees in construction were generally covered, many individuals who performed work on the worksite and exposed to the same risk of injury were exempt from coverage including independent operators who worked as subcontractors on the jobsite and had no employees. Because they were not employees of the contractor, they were not required to have WSIB coverage. The same exemption applied to executive officers of corporations and partners in a partnership performing work on site. The amendments will expand coverage to include independent operators/contractors, sole proprietors, partners in a partnership and executive officers in a corporation (subject to exemptions). A further change to the legislation will require any person who directly retains a construction contractor or subcontractor to obtain a WSIB-issued certificate confirming that the contractor/sub-contractor is registered with the WISB and in compliance with the WSIA. Mandatory Coverage Mandatory coverage will apply to executive officers being those who are listed as officers in the Corporation’s Articles of Incorporation and who physically attend the construction worksite. The amendments provide that corporations will be able to exempt one executive officer from the mandatory coverage provisions.

Exemptions to Mandatory Coverage

Home Renovations – independent operators, sole proprietors, partners and executive officers engaged exclusively in home renovation are exempt from compulsory coverage. One Executive Officer/Partner – A partnership or Corporation may elect 1 partner or executive officer for exemption from coverage provided that that individual does not engage in any construction work. Periodic visits to the worksite are permitted by the exempt individual provided no work is performed on site. The WSIB has published a policy stating that between January 1, 2013 and December 31, 2013, it will waive penalties and/or refrain from investigating and/or laying applicable provincial charges when an employer or individual is non-compliant regarding the new registration and clearance certificate obligations. This said, it is our recommendation that those affected take immediate steps to ensure compliance with the amendments to the WSIA.

Clearance Certificates

Prior to the amendments, the issuance by the WSIB of Clearance Certificates was a common practice in the construction industry albeit optional and often overlooked. Under the new scheme of mandatory coverage, the amendments require a clearance certificate be provided before a person retaining services permits the contractor/sub-contractor to begin construction work. Those who receive the certificates will be required to keep them on file for a period of at least 3 years and to produce them for inspection as the WSIB or its representative may require. Where a subcontractor fails to comply with WISB payment, the Board may revoke the certificate at any time and the subcontractor will be prohibited from doing further work until the matter is resolved. Non-compliance with any of the obligations under the new scheme may constitute an offence with fines up to $25,000.00 for individuals and $100,000.00 for Corporations. Those in the construction industry are well advised to ensure compliance with the new amendments and prepare for the process of securing and retaining clearance certificates on or after January 1, 2013.