WSIB Mandatory in the Construction Industry

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Worker’s Compensation is an insurance required by law in every province and territory across Canada. This insurance by any other name is also mandatory in many countries around the world. It serves two main purposes – to protect employees from work place injuries and to protect employers from lawsuits resulting from work place injuries. The premium can be quite expensive.

Maximum assessable wages in ON for 2012 are capped at: $81,700
WSIB premiums were paid until the employee reached this amount of income (reported in Box 14 of the T4)
Once the employee reaches this ceiling amount, the balance of their wages is exempt from WSIB premiums. Let’s face it, not too many employees in Ontario make this kind of money so most employers continue to pay this premium for each of their employees every month.

The rate the employer is levied will depend on:
the industry classification or type of business they conduct
(the more dangerous the business the higher the rate)
the number of injuries claimed by the companies in this group
the number of claims the individual company has in the year

For example:
The company is assessed a rate of $3.50 for $100.00 of income paid to employees.  The employee’s T4 Box 14 shows an amount of $50,000 the levy is calculated as such:
$50,000 ÷ $100 x $3.50 = $1,750.00 in premiums for the year for this    employee only.

The Ontario Workplace Safety and Insurance Board (WSIB) announced new rules effective January 1, 2013. This will heavily impact the construction industry. Until this date, owners of the construction business are exempt but they are mandated to pay this insurance coverage for their employees based on the above rules.

http://millerthomson.com/en/publications/communiques-and-updates/labour-and-employment-communique/september-21-2012

Going forward in 2013, principal contractors and subcontractors must demonstrate proof or insurance by providing their “clearance certificate” before starting any construction work.  No certificate no job!  Those that hire for these services will need to be more diligent than ever when asking for and receiving copies of these clearance certificates.

WSIB is allowing early registration for construction companies effective immediately.  No premiums will be calculated/due until after January 1, 2013.  They are willing to forgive the penalties for not filing returns on time during the 2013 calendar year, but don’t get too comfortable.  By the end of 2013, you better be compliant or they will lay compliance charges against your organization that could cripple the company.

There is one exemption to this new regulation.  Home renovators who do only home renovations for individual home owners and who DO NOT employee anyone other than themselves remain exempt from this premium.

Whether you’re a home owner, a business owner, or an employee, you need to be aware of the impact this could have one your livelihood.  As a home owner, the insurance a renovator or contractor has will limit their ability to sue you should they be injured on your property.  As a business owner, you want to protect yourself, your employees and your customers.  As an employee, you want to know your boss has your back and they will do what is necessary to protect you by providing occupational safety and insurance.

Here’s to helping you better understand what’s in your pocket

Until next time

 

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