Mandatory coverage for most individuals working in the construction industry

On October 28, 2008, the Ontario government tabled proposed legislation that if passed, would make workers' compensation coverage mandatory for individuals working in the construction industry. Mandatory workers' compensation coverage will be extended to independent operators, sole proprietors, partners in a partnership and executive officers of corporations in the construction industry.

Under existing provisions in the Workplace Safety and Insurance Act , persons who retain contractors or subcontractors to perform work (prescribed in the Act or Regulations) may be deemed to be the employers of the contractors' or subcontractors' workers and may be liable to pay premiums (as determined by the Board) in respect of those workers. New sections in the Act set out a different regime for the construction industry, as follows:

1. Only the person who directly retains the contractor or subcontractor to perform construction work may be liable for the payment obligations under the Act (as determined by the Board) in respect of the work.

2. A person who directly retains a contractor or subcontractor to perform construction work is required to obtain a certificate showing that the contractor or subcontractor has registered with the Board and complied with the payment obligations under the Act. The person must keep the certificate for at least three years. A contractor or subcontractor is prohibited from performing construction work for the person without a valid certificate.

3. These requirements do not apply to a person who directly retains a contractor or subcontractor to perform home renovation work in specified circumstances.

An exemption for mandatory coverage for those individuals who exclusively perform home renovation work and are retained directly by the homeowner, family member or occupant of the home has been planned.

Proposed amendments would not fully come into effect earlier than 2012. This time frame will allow the WSIB to make the necessary technical and administrative changes and speak with construction stakeholders about how the proposed changes would be implemented. The three-year implementation period will also allow business to properly understand and prepare for the new rules.

Bill 119, Workplace Safety and Insurance Amendment Act, 2008 can be viewed at www.ontla.on.ca/web/bills/bills_detail.do?locale=en&BillID=2100.

Previously published

Ontario Labour Minister Peter Fonseca announced that he will introduce legislation that will make workers' compensation coverage mandatory for all individuals working in the construction industry who are currently not covered.

The proposed legislation would also make it mandatory to extend benefits and services contained in the Workplace Safety and Insurance Act (WSIA) for independent operators in construction and some other individuals in the construction industry who are currently not covered.

The intent of the Government is that the proposed amendments would come into effect 3 years following Royal Assent if passed by the Legislature. This 3-year period would enable the WSIB to develop systems to support the proposed changes.

The proposed legislation would extend WSIA coverage to approximately 90,000 individuals in the construction industry currently not subject to mandatory coverage.

The issue of who is covered by Workplace Safety and Insurance Board (WSIB) premiums in the construction industry is critical for many reasons, and includes the following:

• Allowing for a greater emphasis to be placed on health and safety education and training for workers.
  
• Creating equality in bidding for construction work. By avoiding WSIB premiums, independent operators have an unfair competitive advantage.
  
• Lowering overall premiums as the pool of contributors is expanded.
  
• Reducing revenue leakages to the underground economy.

The Provincial Building and Construction Trades Council of Ontario announced its strong support of the Minister's announcement. "This announcement by Minister Fonseca is very important to the construction industry because it will close a loophole that has been exploited by unscrupulous contractors," said Patrick Dillon, Business Manager and Secretary-Treasurer of the Council. "The industry has been working to end this unfair practice for a very long time."

The Provincial Building and Construction Trades Council of Ontario is an umbrella organization that represents over 100,000 unionized workers.