Law
s.141(2)
The person who retains a contractor or subcontractor to execute work shall be deemed to be the employer of workers employed by the contractor or subcontractor to execute the work and is liable to pay the premiums payable by the contractor and subcontractor unless
- the contractor or subcontractor is a Schedule 1 or Schedule 2 employer in respect to the work, and
- the WSIB decides that the responsibility of the contractor or subcontractor is sufficient protection to the workers for the benefits provided under the insurance plan.
s.141(5)
The person may deduct from money payable to the contractor or subcontractor the amount for which the contractor or subcontractor is liable.
s.141(9)
The WSIB retains the right to require the contractor or sub-contractor to pay premiums or reimburse the WSIB in respect of workers who have a deemed employer under this section.Back to top
Policy
The WSIB issues a certificate of clearance that waives the principal’s liability with respect to a contractor (or sub-contractor) whose WSIB account is in good standing.
If no certificate is issued with respect to a contractor, the principal’s liability is limited to any premiums owing on the labour portion of all contracts entered into by the principal and the contractor. Back to top
Guidelines
Definitions
The principal is the person letting a contract (purchasing services).
The contractor is the person providing contractual services.
However, in the construction industry a principal who purchases services from one or more contractors is frequently called the general contractor, and the contractors are called subcontractors.
General
This policy applies to all principals who let a contract for the purpose of carrying on a business activity. It does not apply, for example, to householders who purchase services from a contractor.
Accounts in good standing
The WSIB issues a certificate for an account if the following requirements are met. If the contractor has more than one account, each account must meet these requirements before a certificate is issued for any of the accounts.
- The contractor’s declared business activities are classified in the proper classification units. See 14-01-01, The Classification Scheme.
- The contractor has reported appropriate premiums based on actual or estimated earnings for all past reporting periods.
- All outstanding Premium Remittance forms and Reconciliation Statements are filed.
- All premiums owing to the WSIB are paid up-to-date at the time a clearance is requested. In addition to premiums on earnings, these premiums include interest, service charges, experience rating surcharges, and other non-compliance charges.
Exceptions
In some cases, a certificate or a letter waiving liability may be issued when a contractor’s account is not in good standing or closed (see "Contractor's account not in good standing" and "Contractor’s account closed" below).
Principal’s liability
By issuing a certificate, the WSIB waives its right to hold a principal liable for any premiums charged to the contractor’s account(s) which may fall due during the time the certificate is valid. (See "Types of certificates" below.)
Limits to liability
If the WSIB has not issued a certificate, and a contractor owes money to the WSIB which it cannot recover, the principal is liable for that part of the unpaid sum related to the labour portion of the contract(s) entered into by the contractor and the principal. The principal can hold back that amount from funds the principal owes the contractor.
It is the principal’s responsibility to establish and justify the amount of the labour portion. If the WSIB charges the principal for the contractor’s debt to the WSIB, the principal must provide adequate proof of the amount of the labour portion. If adequate proof is not provided, or if the calculation is inaccurate, the WSIB will estimate the required amount.
Types of certificates
The WSIB issues 2 types of certificates. The form (Form 0190C) for both is the same.
| Type | Issued to | Valid for | Liability |
| 1. Generic | Contractors only | 60 calendar days | Waived for any number of principals |
| 2. Specific | Contractors and principals | 60 calendar days* | Waived for one specific principal |
| *If a certificate or a letter waiving liability is issued for an overdue or closed account, the WSIB determines the period of validity, based on the circumstances of the case. |
Terms & conditions
Contractors or principals may request certificates by phoning, writing, faxing, or visiting any WSIB office and providing the following information
- contractor’s name and WSIB account number
- principal’s name and address (specific certificates only)
- sufficient details of business activities performed for the principal so that the WSIB can review the contractor’s assigned classification unit(s) (specific certificates only)
- facsimile number or address for delivery of certificate.
Advance payment
Before a certificate is issued to a newly-registered contractor, or to a principal for a newly-registered contractor, the contractor must make an advance payment by cash or certified cheque (amount determined by the WSIB).
Concurrent certificates
Once a certificate is issued, another certificate may be issued later relating to the same contractor before the validity period of the original certificate has expired.
In these cases, the second certificate does not extend the validity period of the first certificate. The certificates run concurrently until the first certificate has expired.
Verifying the certificate
Principals presented with a certificate which they suspect is not authentic or accurate should contact the WSIB.
For audit purposes, principals must retain a copy of any certificate presented. Similarly, both contractors and principals must retain any certificates issued directly to them by the WSIB.
Contractor’s account not in good standing
When a contractor’s account is not in good standing, the WSIB may issue a specific certificate only
- for such period as determined by the circumstances of the case.
Contractor’s account closed
Even though a contractor’s WSIB account is closed, a contractor or a principal may request a clearance before the principal makes final payment to the contractor. In such cases, the WSIB issues a letter waiving the principal’s liability only
- if the contractor owes no premiums to the WSIB,
or
if premiums are owing, the principal pays the amount due, and
- for such period as determined by the circumstances of the case.
Letter of Credit provided for disputed premium
The WSIB permits contractors to post a letter of credit representing the disputed premium amount being appealed. In these situations, the WSIB will issue a certificate when a contractor has complied with all requirements listed in this policy under "Accounts in good standing" provided a letter of credit is posted to the account for the disputed premium amount under appeal. For more information see 14-04-05, Alternative Payment Arrangements.
Application date
This policy applies to all decisions made on or after April 7, 2008.
Document history
This document replaces 14-02-04 dated October 12, 2004.Back to top
References
Legislative authority
Workplace Safety and Insurance Act, 1997, as amended
Sections 141, 143
Minute
Administrative
#7, March 17, 2008, page 460 Back to top |