The mandatory WSIB regulations that came into effect in January extend insurance benefits already in place for employees to business owners, as well as corporate officers, independent operators, sole owners and business partnerships. While the new rules will impact the cost structures for many in the construction industry, they will also ensure that companies and individuals doing construction in Ontario have adequate coverage.
For example, under the new rules, anyone working in the industry (not just the office worker or the labourer, but also the owner) is required to have the mandatory WSIB coverage. In most cases, dividends are included as well in the computation of insurable earnings.
Your role as a business owner is to ensure that anyone you contract with follows through on their obligations under the act. If the person you hired doesn’t comply, you could be called on to pay the premiums to the WSIB yourself.
Additionally, if you employ a contractor you have to ensure that you obtain a clearance certificate from the WSIB before the contractor begins work. If, for some reason, the contractor has an expired certificate or their certificate has been revoked while construction is still ongoing, you are responsible for securing a valid clearance certificate before any further work can be done on the project, opening up a potential can of worms for construction companies and developers alike. That same clearance certificate must be kept for three years in case an inspection takes place. Even if you don’t have employees but are an independent operator and/or partner, you will still need to have a valid clearance certificate to work.
However, there are some noteworthy exceptions to the rules. Individuals, partnerships or corporations performing exclusively residential home renovations are exempt from registering with the WSIB under certain circumstances—related to working directly for the occupant or a family member of the occupant on their residential home.
Partners or executive officers that wish to be exempted will have to demonstrate that they themselves are not involved in any actual construction work pertaining to any and all building sites. The catch, however, is that only one person, partner or executive officer can apply for the exemption in the case of commercial construction. For other executive officers in a non-construction corporation or partners in a partnership, there is a new rate group with a premium rate for 2013 of 21 cents that can be applied for and added to the account.
Private disability coverage
Previously, workers may have taken on private disability insurance where now WSIB coverage is required by law. The WSIB takes precedence for compensating workers who are injured on the job. Those with disability coverage are advised to speak with their insurer and understand how the new rules affect their premiums and work-related claims.
Penalties for non-compliance with provisions of the act can result in fines of up to $25,000 and/or imprisonment for six months. Corporations can also be hit with $100,000 fines for each infraction.
Now that the new rules have come into effect, it is extremely important to understand your obligations, factoring them into how you do business so as to minimize your exposure to any liability that could arise, enabling you to avoid any unforeseen consequences.
Laurie Bissonette is a partner with KPMG Enterprise in Sudbury, Ontario.