Did you know independent operators, sole proprietors, partners, and executive officers in the construction industry are considered ‘workers,’ unless specifically exempted? This means that individuals and companies are required to register and pay for mandatory WSIB coverage if they perform Class G construction work.
Depending on your situation, the amount of insurable earnings to be reported, and the premiums to be paid, will vary. For independent contractors, only the labour portion of a contract or invoice qualifies as insurable earnings.
WSIB defines “construction work” as any physical work of a skilled or unskilled nature, operation of equipment or machinery, or the direct on-site supervision of workers.
Exemption from WSIB Coverage
Partnerships and corporations may elect to have one partner or executive officer exempt from coverage, provided that individual does not take part in any construction work (as defined above) by filing form 1208WA. Proof of the appointment must be verifiable in documents and public records, such as the corporate minute book and corporate profile reports. WSIB may even ask to review the details of the role, responsibilities and authority within the corporation.
WSIB Rate Category for Non-exempt Partners and Executive Officers
WSIB has a rate category (755) for “non-exempt partners and executive officers in construction.” Upon request, WSIB will allow the earnings of executive officers and partners to be reported in this category, provided they have not taken part directly in any construction work. Form 1209WA is used to apply.
The WSIB maximum amount of insurable earnings for 2016 is $88,000; the premium for category 755 is 21 cents per $100 of gross earnings. For each non-exempt executive officer, there would be $184.80 in WSIB coverage payable annually.
If the executive officers or partners are directly involved in construction, they will be assessed based on the premium for the relevant construction rate group, not the 755 rate category.
It should also be noted that WSIB also sets out an annual minimum amount of insurable earnings for sole proprietors, partners, and executive officers equal to one third of the annual maximum amount of insurable earnings or $29,333 for 2016.
There is a minimum premium per year of $100 per account per calendar year. This charge exists for those who are reporting zero insurable earnings as well.
Navigating the WSIB rules for the construction industry can be tedious and complicated. We didn’t even get into the expanded coverage for those engaged solely in home renovation work. Be sure to speak with your accountant to help ensure you fully understand the rules.
