Workers’ compensation clearances for your sub-trades

Each province’s compensation act lets the board collect a contractor’s or sub-trade’s unpaid assessments from the person who hired them. The board’s answer to "how do I protect myself" is the same everywhere: get a clearance showing the sub is registered and in good standing, and keep it.

The bill usually relates to the labour on your contract with that sub, which on a framing or drywall sub is most of the price. WSIB’s policy, for example, says that without a clearance your liability can be up to the value of the labour portion. Collecting a certificate of general liability insurance does not cover this. A sub can have perfect liability insurance and be months behind with the board.

Each row comes from the board’s own pages and the act. Where we could not read the act’s exact wording, the table says to check with the board.

A clearance is a snapshot. It shows the account was in good standing up to a date, and a sub can fall behind the week after. That is why boards tie the check to money, not to the calendar: before the work starts, at each payment where the board says so, and always before the final payment and any holdback release.

A workable routine for a small GC: get a clearance before a sub sets foot on site, re-check before every payment in provinces whose board says so (Newfoundland and Labrador, Saskatchewan and Alberta all tie it to payment), and in Ontario keep a current certificate on file and replace it before it expires. Most boards let you save a list of subs and email you when one’s status changes. Use that.

Keep the clearances. WSIB says to keep them for three years. They are your proof if the board comes asking.

"He works alone, he doesn’t need coverage" is the most common mistake, and in Ontario it is usually wrong. Section 12.2 of Ontario’s act deems independent operators, sole proprietors, partners and executive officers carrying on business in construction to be workers, so they must register and have coverage. A partnership or corporation can exempt one partner or executive officer who does no construction work. There is a narrow exemption for home renovation done directly for the homeowner who lives there, which does not apply to subs working under a GC.

In most other provinces, owners, partners and sole proprietors can buy personal coverage but do not have to (WorkSafeBC calls it Personal Coverage, WCB-Alberta personal coverage, WorkplaceNL Optional Personal Coverage). That does not end your exposure. WCB Saskatchewan’s policy says an uncovered contractor can be treated as the principal’s worker, and Quebec’s act can deem a self-employed person a worker of the client. Ask the board how a one-person sub is treated in your province before you assume it is not your problem.

• Before a sub starts: clearance in hand, plus their liability certificate and any trade licence the work needs.
• Before each payment: re-check where your board ties the check to payment. Do not pay against a lapsed clearance.
• Before final payment and holdback release: a final clearance, and the statutory declaration your contract calls for.
• Keep every clearance with the job, dated.
• If a clearance comes back "hold", "demand" or not in good standing, call the board before you pay. Several let you withhold the amount owed.