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Independent operators, executive officers and partners in a partnership working in construction will need to have WSIB coverage.

Independent operator in construction means, an individual who,

• does not employ any workers
• reports himself as self-employed to Canada Revenue Agency
• is retained as a contractor by more than one person during an eighteen month period.

or

• an individual who is an executive officer of a corporation that,
• does not employ any workers other than the individual, and
• is retained as a contractor by more than one person during an eighteen month period.

Two exemption from WSIB coverage are available:

 1. Home renovation work

Independent operators, sole proprietors, executive officers and partners in a partnership working in construction industry are exempt from compulsory coverage if they are engaged exclusively in home renovation work.

What is exempt home renovation work?

Exempt home renovation work means construction work that is performed by an independent operator, a sole proprietor, a partner in a partnership, or an executive officer in a corporation and, on an existing private residence that is or will be occupied by the person who directly retains the contractor, or by a member of the person’s family.

Independent operators, sole proprietors, partners and executive officers are subject to compulsory coverage when their business is engaged in non-exempt work.

WSIB coverage exemption is not available if you engage in what would normally be regarded as exempt home renovation work, as well as non-exempt work. The insurable earnings reported for the independent operator, sole proprietor, partners or executive officers must include the earnings related to all construction work, including the home renovation work.

2. Exemption of a partner or executive officer

This exemption applies to partnerships, corporations with workers, and corporations without workers but with multiple executive officers. This exemption does not apply to a corporation with one executive officer and no workers.

A partnership or corporation may elect one partner or one executive officer, respectively, for an exemption from coverage if the partner or executive officer does not engage in any construction work. Periodic site visits are permitted, provided that the partner or executive officer is not performing construction work on the site.

Reporting of Insurable Earnings

Independent operators.

Independent operators must determine their own insurable earnings. The gross insurable earnings are based on the labour portion of the contract. If labour costs are not adequately recorded the following formulas should be used:

• If there is no evidence that the contractor supplied major materials and/or heavy construction equipment used in the direct performance of the construction work, the WSIB considers the entire contract value (100%) as the contractor’s gross insurable earnings.
• If there is evidence that the contractor supplied major materials, and/or heavy construction equipment, used in the direct performance of the construction work, the WSIB permits the principal to identify the labour portion using the following allowed percentages:

1. where a contractor provided labour and major materials, the principal is to use 60% of the contract value as the contractor’s gross insurable earnings.
2. where a contractor provided labour and heavy construction equipment, with or without major materials, the principal is to use 33 1/3% of the contract value as the contractor’s gross insurable earnings.

Sole proprietors with workers and partners in partnership with or without workers.

The insurable earnings for a sole proprietor in construction, and a partner in a partnership in construction, are the individual’s annual self-employment business income reported to CRA on line 135 of T1 General

Executive officers in a corporation

The gross insurable earnings of an executive officer is based on the total of:

• employment income reported on a T4 Statement of Remuneration Paid
• other insurable employment income reported on a T4A, Statement of Pension, Retirement, Annuity, and Other Income
• dividends reported on a T5 Statement of Investment Income, and
• director fees issued by the corporation to the executive officer.

Minimum amount of insurable earnings

The WSIB sets an annual minimum amount of insurable earnings for sole proprietors, partners and executive officers in construction. Each year the minimum amount is set at 1/3 the annual maximum amount of insurable earnings ($81,700 in 2012).

Who need to register?